What to Do in a Market Sell-Off
Market declines are a reality of investing. No one can avoid them all, unless you stay in cash all your life (which is still a money-losing strategy, if you consider the impact of inflation).
The throes of a market downturn can be emotionally taxing to investors, but a market corrections should not mean an invitation to panic. Experienced investors know how to mitigate emotional decision-making during market sell-offs with a measured, rational approach that rides-out temporary pullbacks.
First, creating and sticking with an investment plan can help investors weather the storm of a sell-off. When plans are constructed with care – accounting for present and future goals, risk tolerance, and other factors – investors tend to avoid making reactionary decisions with negative ramifications. If you’ve worked with an advisor to select an asset allocation that addresses your long-term objectives and your tolerance for risk, then just remember that your asset allocation also accounts for the natural ups-and-downs of investing. It comes with the territory.
Diversification provides a vital safeguard against negative market behavior. Stocks as an asset class have reliably delivered solid returns over time, but they’re also inherently volatile. Less volatile assets like bonds may not skyrocket in value, but their (generally speaking) low correlation to the stock market and their ability to post steady or slightly positive returns in down equity markets makes them a great way to hedge against losses and, consequently, an important part of any portfolio where risk tolerance is a factor.
Timing is crucial when investing, but that doesn’t mean trying to time the market when it’s in a volatile patch. Picking and choosing when to be active based on downturns can mean missing out on large gains. Data shows that every downturn on the S&P 500 of 15% or more since 1929 has resulted in a recovery – to the tune of a nearly 55% average return in the year following a decline. This means a real chance to profit for those brave enough to endure the down cycles.
While timing can lead to big gains, earnings are typically maximized by a patient, long-term approach. An impending bear market may seem catastrophic in the short term, but investors who can see beyond immediate events and maintain perspective are usually rewarded over time – after all, the S&P 500 had a mean return of 10.43% over 10-year periods from 1937 to 2014.
Even healthy markets have downturns, but corrections and new highs have consistently followed throughout history. Staying rational and focusing on a well-planned investment strategy means viewing sell-offs for what history indicates they are – a frustrating, but temporary, market behavior portending better things to come.
Looking for Fresh Investment Ideas? See How Algorithms and A.I. Can Help
Want to invest and/or diversify your portfolio but unsure where to start? Artificial Intelligence can help! Tickeron has developed user friendly Artificial Intelligence tools to help new and experienced investors generate investment ideas. Tickeron’s A.I. is capable of evaluating a portfolio and providing a “Diversification Score,” to tell the user how well-diversified their portfolio is. It can also generate investment ideas for a user’s 401(k) plan – even if you’re just getting started! The A.I. will give you ideas based on your risk tolerance, investment objectives, and the investment options available.
Tickeron’s new financial website is available to beginners, intermediate investors, and even experts and advisors. Explore tickeron.com today.
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.
Momentum Indicator for SPY turns positive, indicating new upward trend
SPY saw its Momentum Indicator move above the 0 level on September 21, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 76 similar instances where the indicator turned positive. In 67 of the 76 cases, the stock moved higher in the following days. The odds of a move higher are at 88%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for SPY just turned positive on October 02, 2026. Looking at past instances where SPY's MACD turned positive, the stock continued to rise in 42 of 52 cases over the following month. The odds of a continued upward trend are 81%.
SPY moved above its 50-day moving average on September 17, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +1.42% 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in 301 of 362 cases, the price rose further within the following month. The odds of a continued upward trend are 83%.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 51 of 70 cases where SPY's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 73%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
SPY broke above its upper Bollinger Band on September 21, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for SPY entered a downward trend on September 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
Category LargeBlend
Advertisement