Things to Know about the Current Market Environment

Market commentary points to a backdrop of unusual volatility even as the broader trend remains supported, framing the current environment as a “wall of worry.” The article argues that Wall Street’s largest daily upside moves historically often occur during bear markets due to oversold snapback and short-covering rallies, citing examples from March 2020 during COVID-19 and other selloffs earlier in recent years. It notes, via OddStats, that for the first time in 26 years the Nasdaq 100 ETF (QQQ) has had four sessions of 3% or more within 12 trading days without being in a bear market or correction. It also highlights seasonal patterns, saying June has been the weakest month since 1950 in mid-term election years, averaging about a 2% loss. Sentiment remains bearish despite market rebounds, with the AAII survey showing bearish sentiment outweighing bullish and CNN’s Fear & Greed indicator flipping from “Greed” to “Fear.”