Yet another ugly day! If there is a consolation, it is simply that yesterday was a holiday, the bond market was closed (no leadership), and volume declined. Prices however, were lower:
“Please try to remember the good times, Warm days filled with sunshine, And just a little bit of rain”. Martina McBride It is way to early to say the bull is dead, way to early. At this point it is just a little bit of rain. A warning of big storms perhaps, but for now it is just a little bit of rain.
I forget exactly where I read this recently, but it has been over 750 days since the last 10% correction. A little bit of rain 🙂
Mary Erdoes, chief executive officer of asset management at JPMorgan, is calling for a correction to be either much smaller or much greater than ten percent. As Yogi Berra was once quoted: ““It’s tough to make predictions, especially about the future.” That is not a prediction at all, it is kind of like saying the markets will fluctuate. However, that quote on Bloomberg yesterday morning.
Let us put any correction or bear market if you are so inclined into perspective. Weekly chart of the S&P 500 for the entire bull: Click to enlarge.
While the declines so far may feel like a lot, the above chart should put it into perspective. Of course the question naturally becomes are we entering a new bear or is this merely that long awaited correction? It appears to me, at the moment, that the bears have really come out of the woodwork calling the recent activity “The Top“.. If I am reading that correctly then this correction may have run its course or perhaps just a little bit more work to do before the next up leg. The Fear/Greed index cannot go any lower 😉
I saw the following chart posted on a Message board yesterday. The chart was looking at the similarities in S&P action today versus the 2013 correction just prior to the markets taking off in the first quarter of this year.
I thought it quite interesting and obviously quite similar.If it fails here then I think we may be looking more towards that 10% correction. Time will tell.
ETF Sectors:
The Better performers today, not unlike Friday – Defensive!
Lousy performers, also largely a repeat of Friday, with the Semi’s leading the pack down.
Movers and Shakers
I can only bring this to you once in awhile (It is proprietary)
Tomorrows Reports and Earnings:
- Economic Calendar for the Week!
- Earnings – Click on Date
Potential Market Movers: Big Banks, & JNJ will report.
A Strategy
Regardless of whether you lean bullish or bearish, whether you are looking to buy or go short there are always opportunities. One of my favorite, perhaps everyone’s favorite chart pattern involves base building. Bases are indications of one of two happenings, accumulation or distribution. The winner is price moving out of the base, until it does it is a battle between the bulls and bears.
I will try and point out these conditions as I see them either from the ETFs, our watch lists, or any other source. :AmerisourceBergen Corporation (ABC) is part of the 50 Watch List:
Keep in mind that ABC is up some 513% since the 2009 lows.
Talking Points and Are We Headed for an Ugly Correction?:
Down A Slippery Slope (Alhambra)
How Scared Should Investors Be? (WSJ)
The Most Important Chart On Wall Street (Short Takes)
15 Economic Facts About Millennial s (Medium)
Is That 10% Stock Market Correction Finally at Hand? (24/7 Wall)
It’s Official: Partisan Rancor Worst in Over a Century (Bloomberg)
Confessions of a Financial Services Worker (Prag Cap)
In the 7th inning of a correction (Cam Hui)
What Are the Odds We’re Heading For Another Crash? (Wealth of Common Sense)
Bill Gross: Why I Left PIMCO (CIO)
Why I’m adding more money to my favorite stocks (MarketWatch)
How Libertarians Would Handle an Ebola Outbreak in Texas (Newsweek)
Why so many are unemployed for so long (Washington Times)
The Quantitative Value Philosophy: Buy the Cheapest, Highest Quality Value Stocks (Alpha Architect)
5 things to do when markets plunge (Post)
Will Yahoo’s Board Save Marissa Mayer? (Bloomberg)
Why is the recovery so weak? It’s the austerity, stupid. (Washington Post)
The Other Bull Market (Fool)
Are We Headed for an Ugly Correction?
Have a Great Day!