Is That 10% Stock Market Correction Finally at Hand?

24/7 Wall St. wanted to see what exactly a 10% correction would look like in the S&P 500 and in the DJIA. The good news is that these are close. The bad news: many investors may still have more fear once they see a 10% correction than they have in courage.

Unfortunately, the DJIA and the S&P 500 just broke under their key 200-day moving averages. The DJIA had already begun that break under the trend line, but the S&P 500 just did that on Monday.

24/7 Wall St. has provided information and levels on the DJIA, the S&P 500, the Nasdaq and the VIX. Prices were in the final minutes of trading on Monday rather than on exact closing prices. Also in oversold readings, here are the worst performing S&P 500 stocks of 2014 – and look at how poorly solar shares have performed!

The S&P 500 has a 52-week range of 1,692.13 to 2,019.26, and that high was seen as recently as September 19. A 1.5% decline in late on Monday to 1,879 is effectively drop of 6.9% from the peak. That 1,879 would also only have to see a drop to 1,817.33 to be a 10% correction from the high.

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The DJIA has a 52-week range of 15,136.40 to 17,350.60, and the DJIA’s high was also on September 19. After a 210 point drop in the DJIA on Monday afternoon to 16,330, the DJIA is down 5.9% from its high as well. A 10% correction would be down at 15,615, another 715 points lower.

Nasdaq was down 1.4% to 4,216.43 late on Monday, against a 52-week range of 3,766.28 to 4,610.57, so it is down 8.5% from its 52-week high. A 10% correction would be down right at 4,150, a drop of another 66 points or so.

The CBOE Volatility — the VIX or Fear Index — has also risen handily since the volatility and selling have come into play. The VIX was up 3.19 at 24.43 (up 15%) on last look. We have a chart on that as well after the Dow and S&P charts below.

We have included a DJIA chart and S&P 500 chart from StockCharts.com below to show the moving average violations that have taken place.

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