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I’ve got to be honest with you.
During the recent pullback, I kept hearing the same thing from traders… It feels terrible. This feels like we’re down 25%.
But we weren’t. We were down roughly 8% to 9% — not 25%, not even close.
When you step back and look at the monthly charts, it becomes obvious. The move never even cracked 10% from peak to trough. It sat right in that 8% to 12% range, which is a completely normal correction in a bull market.
Yet the overwhelming feeling was that things were falling apart, and that disconnect between perception and reality is the real story.
Why This Correction Felt So Much Worse
A big part of it comes down to what happened before the pullback. The market spent nearly five months going nowhere, chopping sideways and frustrating traders. When you finally get a move after that kind of stretch — especially a downside move — sentiment tends to break much faster than price does.
Then you layer in the headlines. Fear was constant, uncertainty was everywhere, and that environment amplifies every move. A normal pullback starts to feel like something much bigger because the narrative surrounding it is so heavy.
Put those together — a stagnant market followed by a downside move in a negative news cycle — and you get a correction that feels far worse than it actually is.
When you zoom out, the story changes completely. On the monthly chart, there’s no real structural damage. There’s no breakdown, no shift in trend — just a continuation pattern.
In fact, the structure looks very similar to a V-shaped recovery. The difference is timing, not behavior. One played out within a single month, while this one stretched across two, but the underlying structure is nearly identical.
That matters, because it tells you this wasn’t a market rolling over — it was a market resetting.
What This Means Now
At this point, the market is pushing back toward all-time highs, volatility has cooled, and the broader structure still points higher.
There’s also pressure building beneath the surface from traders who leaned short late in the pullback. As price continues to move higher, that positioning can unwind and add fuel to the upside through short covering.
That’s often how these moves extend — not just from fresh buying, but from traders being forced out of the wrong side of the trade.
This wasn’t just about a correction. It was about perception.
When you’re in the middle of a pullback, it’s easy to let emotion take over and assume the move is bigger or more dangerous than it really is. But when you step back and look at the data, the picture is usually far more stable.
This correction never produced a meaningful bearish signal on a higher timeframe. It was noise within a larger trend, and now, in hindsight, that’s exactly what it looks like.
Now don’t forget to join us at 10 a.m. ET weekdays for Opening Playbook, and at 3:30 p.m. ET Closing Playbook!
Nate Tucci
Tucci Trades
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