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My WAG is the latter. The bad news is not turning positive over night and when it gets digested this weekend--more pain on Monday.
However, I am wrong a lot!
When Covid first hit the market fell hard, and recovered fairly quickly.
When Delta first took hold, the market fell, and recovered very quickly.
Not to be diminish the ongoing impact of Covid, why is this one going to be different?
Since you asked...
I quoted my entire response for complete understanding. Note that I did not mention recovery at all. And I started off with "My WAG." I think it's important to quote the entirety of most messages, right?
I was only talking about Monday, Nov. 29, 2021, It's a guess, and as I mentioned in the quote, I am wrong a lot.
To answer your standard, generic question, if you examine a drop and recovery as a binary, yeah everything is the same, and nothing is different. I suspect many recognize that, and develop a deeper understanding of investing. For example, I believe in the long strategy, economic cycles, and the insights of the greats (fill in the name of your books here). 85% of our investments are in passive index funds.
I looked at VXF (Extended Market ETF) to find the recoveries you mentioned. Yep, they are there. And I believe your mind's eye is on a long signal, something like the 200dMA or longer. But this thread is about a dip, and what fun we have talking about it, and trying to gain an advantage.
I believe every moment in time is different. It doesn't give me comfort to think everything's the same and will remain that way. I am hopeful that economies and markets find ways to keep progressing. Even though I have beliefs, I don't try to cut discussion short. I find usefulness in many threads that seem to get quick dismissal from others.
Since you've introduced the longer view, I will comment that I think a reasonable hypothesis about radical new variant is that the drop and duration will be between those two earlier cases on the chart. So you're talking about March and November. However, someone could just as easily refer to March thru November, meaning it took 9 months to recover. That is the great thing about charts, that we can interpret differently.
The problem we all have in buying dips is right there in the chart. We will see if the worm turns downward, won't we? Now that I've explored more, I believe it's possible we are in a much longer and slower recovery. The sideways movement of small/mid in 2021 is something to watch.
Sorry about going on about this, but even small comments deserve a thorough response.