Market Plunges on No News – the Bear Market is Here

The DJIA (Dow Jones Industrial Average) dropped 115.48 points to end the day at 9816.49. The Nasdaq Composite dropped 45.27 points to 2173.90. This represents a drop of 1.35% for the Dow and 2.04% for the Nasdaq.

The plunge occurred in the absence of any major market news. This is a strong indicator that we have entered a bear market.

This latest drop piled on top of Friday’s 324 point plunge and created new 2010 lows for the DJIA. If this is indeed the start of a new bear market these won’t be record lows for very long.

Investors are simply unwilling to put money into a market that remains overshadowed with fear of new government regulations.

The biggest news of the day was Apple’s launch of the next generation iPhone 4, but Apple stock fell 2% on the news.

Even news of improved fiscal governance from the Hungarian and German governments couldn’t buoy investor sentiment.

Keith Bliss of Cuttone & Co told FOX Business “We still think we’re short-term oversold. We’re not going to get back to the highs of October 2007 any time soon.” When a market that fell over 3% in two days is still considered oversold, you are in a bear market.

In other words, the party is over. The market has entered a “corrective” phase and stock valuations are going to come down until they reach levels more in line with expected corporate earnings.

If you are an individual investor, this could be an excellent time to exit the market near it’s recent peak and wait to buy back in after the coming bloodbath.