S&P 500 on track for 20% decline from Jan. 3 record closing

NEW YORK Reuters - Wall Street's main stock index fell on Friday, with the benchmark S&P 500 on track to confirm a decline of more than 20% from its Jan. 3 record closing high, a commonly used metric to determine a bear market.

Since the beginning of the year, stock prices have been under pressure as investors have dumped stocks due to concerns over whether the Federal ReserveFederal Reserve will be able to tame inflation without a recession, with spillover effects from the war in Ukraine and the possibility of a slowdown in China from a rise in COVID 19 cases adding to the angst.

MARKET REACTION: STOCKS: Dow down 1.35%, S&P 500 down 1.62%, Nasdaq down 2.23%

If we don't today, it'll be Monday. There really hasn't been much of a bounce in all of the trading that's gone on in the last couple of weeks. Any bounce we've had has gone away quickly. We're going to be in a bear market today if not next week. It's a given, with what happened to Nasdaq and small caps. It's not a surprise that the S&P finally gets there.

I don't think investors sell because we're in a bear market. They've been selling all along. The Fed does a lot of the same thing. They have always come to the market's rescue. We're not sure where Powell put this time around - or if there is one. We haven't seen any impact of the rate increase outside of housing, despite the fact that they've raised rates twice. It does look like we are finally going to hit a bear market on the S&P 500, which to me is the final straw that says you are truly in a bear market, you have to close below 3,836, which is below that level now. We might get one of those late-day rallies, like we sometimes get, so it may not happen. The one thing that doesn't seem to line up as far as the washout goes, or the capitulation, is the VIX. Thirty-two is not a low VIX, historically it is high, but it is not at all in line with what you see when everyone throws in the towel, I am selling indiscriminately, I am just trying to save what I got left thinking. We haven't seen that. You are going to need to see something above forty and sometimes it is even higher than that. If you go back to the COVID bear market in early 2020 it will hit like eighty so it is not close to that. I am not sure if it happens today or early next week, but I am not convinced we are at the bottom yet because of that. We could just go into a slow, downtrend, which is something we have been in since the second day of this year, and it is not required to have one of those days. While that doesn't hurt as much at once, it is just like pulling the bandaid off slowly, it is going to be long and slow and painful and frankly could go on for several more months so I don't know. Without that huge, giant volatility spike and that capitulation-type feeling, I am hesitant to make any predictions that we are at the bottom.