Stocks Plunge – What Happens Next?
It’s been a rough couple of weeks for stocks. After about two years of dormancy, volatility is back in the markets with the S&P 500 crossing into correction territory (-10%) for the first time since early 2016. The question on many investor’s minds is, what happens from here?
History suggests a few outcomes may be possible.
According to Goldman Sachs Chief Global Equity Strategist, Peter Oppenheimer, the average bull market 'correction' is about 13% over four months, with about a four-month period needed for stocks to recoup the lost value. At this rate, that could technically mean getting back to even from current losses by this fall! Not an ideal outcome, but remember that averages and history are just meant to provide insights – not forecasts.
Another statistic Mr. Oppenheimer mentions is that if the S&P 500 crosses the 20% mark, which would technically put it into bear market territory, then the ‘pain’ lasts for 22 months on average, with a much longer recovery time before getting back to even.
Most big players in finance such as Goldman Sachs, JP Morgan, Credit Suisse, Bank of America, and others are forecasting a positive year for stocks in 2018, so the bear market outcome appears remote according to their forecasts. Most of the economic data and fundamentals they cite for a positive year remain intact, which gives the impression that what is occurring today in the market is a stock market correction, not a bear.
So, if this is a stock market correction and not a bear, what should investors do next? Famed mutual-fund manager Peter Lynch has perhaps the best advice, when he said that “far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” In other words, if the investor believes this to be a correction, which means it’s a short-term dip in prices, perhaps the best approach would be to see it as a new opportunity to invest in areas that look attractive. Or, do nothing at all.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
GS in downward trend: 10-day moving average moved below 50-day moving average on July 31, 2026
The 10-day moving average for GS crossed bearishly below the 50-day moving average on July 31, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on August 18, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on GS as a result. In of 75 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for GS turned negative on August 19, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at .
GS moved below its 50-day moving average on August 06, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GS declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GS advanced for three days, in of 351 cases, the price rose further within the following month. The odds of a continued upward trend are .
GS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 287 cases where GS Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 85, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. GS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.758) is normal, around the industry mean (4.401). P/E Ratio (16.048) is within average values for comparable stocks, (21.328). Projected Growth (PEG Ratio) (1.475) is also within normal values, averaging (1.691). Dividend Yield (0.016) settles around the average of (0.032) among similar stocks. P/S Ratio (4.869) is also within normal values, averaging (17.980).
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