You can’t even spell “capitulation”

People are starting to freak out a little.

A massive amount of individual stocks have dropped more than 20 percent from their 52-week highs this fall and this is beginning to dawn on folks. The bullshittiness of the S&P 500’s year-to-date gain – driven by an ever-dwindling handful of gigantic darling stocks – is starting to lose relevance. The lack of participation by a growing number of stocks and sectors is all people want to talk about this week, despite the fact that the long-term trend for large caps is still intact.

For one glaring example of this, let’s look at the rate of descent for the NYSE advancers vs decliners (large pane) and compare it with the price action in the S&P 500 index (top pane). As you can see, the cumulative total of net advancers on the NYSE is dropping rapidly while the S&P 500’s price barely budges. We’re within a few points from record high prices, but each day fewer stocks are playing along.


This can resolve itself to the upside, of course, it certainly did in February and August. But the longer this divergence persists, the more anxious people get – and with good reason.

But it’s not quite panic. It’s just concern, for now.

It’s important to look at what real panic looks like as a reminder. It just so happens that today is the six-year anniversary of one of the most panicky days of all time. On September 29th, 2008, the Dow Jones Industrial Average recorded its largest one-day point loss of all time.

Let’s take a trip back via the magic of my Googling skills…


Screen Shot 2014-09-29 at 5.39.58 PM


New York Times:

Screen Shot 2014-09-29 at 5.42.06 PM



Screen Shot 2014-09-29 at 5.42.51 PM

If you’re new to the market or haven’t been around through a period like the one chronicled above, you don’t get to use the word “panic” and you damn well don’t get to throw around the term “capitulation”, which I actually heard someone on the air say today. Dude, you can’t even spell “capitulation”.

The recent deterioration we’ve seen in market internals absolutely has investors a bit on edge. But let’s keep it in perspective.



This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. 10 Tuesday AM Reads | FAN FICTION PLANET commented on Oct 01

    […] You can’t even spell “capitulation” (TRB) see also Is Rampant Hedging a Bullish Sign? (Barron’s) • Google study heightens fund […]

  2. harry commented on Jan 28



  3. Sergio commented on Jan 28


    good info!

  4. EatVerts commented on Sep 22

    … [Trackback]

    […] Info to that Topic: […]

  5. online dating commented on Oct 14

    … [Trackback]

    […] Find More here on that Topic: […]

  6. rbc online banking sign in canada commented on Nov 17

    … [Trackback]

    […] Info on that Topic: […]