Colas said Thursday the 2008 playbook puts the current period in-line with Oct. 10, 2008. After a huge sell-off to start the month of October, the S&P 500 found brief support and traded mostly sideways for about two weeks before the sell-off resumed in late October and early November.
“If the 2008 playbook works (and it certainly has so far) US equity markets are set for a short period of relative stability over the next week or so,” Colas said.
Colas cautioned investors about making the same mistake he has seen play out many times during similar periods in the past.
“The pattern is always the same: they see a few days of calm in a troubled stock or the market as a whole and assume the worst has passed,” he said.
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