February 6,2018 (Updated July 12, 2018)

This article was previously published (http://ezinearticles.com/?Its-Not-Over&id=9880006) and is posted here in its entirety to increase awareness.

Amidst the market's current volatility, it is easy to forget that back in January we enjoyed record calm seas and gains. Back then, on Friday, January 26, the stock market was on pace to break the all-time record for longest streak without a 5% decline set back in 1959. It would have been a done deal later in February. Back in October the S&P 500 eclipsed the record for consecutive days without a 3% drop and was building on it with each passing day. Volatility, as measured by the VIX index, had recently hit record lows. The market's average open/close difference had been 0.3%, the lowest since 1965. What could possible disrupt this windfall sea of tranquility? Plenty!

That was all done away with a week later. On Friday, February 2 the 3% streak was stopped cold as the market went 3.93% below the intraday high reached January 26. With a better than expected jobs report (200,000 vs. the expected 180,000) February 2 and wage growth picking up at the fastest clip since the recession, there was widespread fear that renewed growth prospects would force the Fed to raise rates more aggressively than advertised. The next Monday's 4.60% drop made it clear that what started out as an organized exit from high dividend yield stocks had turned into a stampede for the entire market. It did not help that priced-to-perfection high flyers such as Google and Apple had disappointing earnings reports.

The February 5 drop brought to a close the market's quest for longest streak without a 5% decline. It was the worst decline since August 8, 2011, 4.62% back then, and the worst point decline in Dow Jones history at -1175. The VIX index, which had stood at 11.08, climbed to 37.32. It could have been worse. The Dow was down as much as 1597 points by mid-afternoon. Two weeks after the market had closed in record territory it went through a correction.

Those that had been lulled to sleep by complacency got a rude awakening. That whisper quiet market ride was not the new normal but it may have been a fabulous lull before the storm. So, those entertaining diving back into the…

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