This has been an okay earnings season after one-third of S&P 500 companies have reported.
79% beat EPS and 65% beat revenue estimates. However, median beats are a bit less than in the prior three quarters.
Reactions are weak, not great, with a median loss of 0.7% across all companies. Eight of 11 sectors have a median loss.
Partly due to forward estimates, which are now coming down a bit leading into the first half of 2019.
Now that the S&P 500 has moved to 10% off highs this week and has clearly closed below the 200-DMA, we take a look back at similar corrections.
Since 1970, the S&P 500 has sustained 10% or greater corrections (from 52-week highs) and closed below its 200-DMA before then continuing in a bull market on 22 occasions (see charts in report).
Conversely, a 10% or greater correction and a close below the 200-DMA has turned into a bear market on five occasions (see charts in report).
Keys differences include the direction of the 200-DMA and whether the index is forming a series of lower highs and lower lows or is able to establish lows.
