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More Volatility Likely in March, Recent Lows Remain Key

Thus far the market has been unable to find any real traction in the historically bullish month of March. As of today’s close DJIA is down 3.72% in March. S&P 500 is off 4.65%, NASDAQ is fallen 6.95% while the Russell 2000 is lower by 4.15%. Today’s gain by the small-cap Russell 2000 is somewhat encouraging and adds to the accumulating evidence that the market may finally be coming to terms with Ukraine, inflation, and the Fed. As we have noted in recent posts, investor sentiment has reached bearish levels last seen at the start of the covid-19 pandemic, S&P 500 has held its intra-day low reached on February 24 and VIX, although elevated, has not exploded to full-blown panic levels.

In addition, we can add March’s typical performance over the last 21-years to this list. As you can see in the chart above, the market has tended to selloff early in March and find a bottom around the sixth trading day of the month. Today was the sixth trading day. Afterwards the trend remains choppy, but it is generally higher until the end of the month.

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