Dow Still OK, Q3 Correction Still Preferred, Stock Guys Become Bond Experts
Let’s start by answering some questions. We still own DIA which we recently bought for a move to new highs. Any further weakness and we will exit and move on. It is a laggard play and is supposed to see some attention this month.
I wrote about SpaceX the other day and have the selling lens on just looking for a spot or two after having bought it two or three times during the July and August plunge.
And no, the NASDAQ 100 has not regained the blue arrow area around 30,300 where an all clear would likely be signaled.
Starting late last year, I targeted Q3 for a potential 10% correction in the stock market. It’s something I have written about a lot. The open question was whether the March 10% decline was it for the year. Right now, my most favored scenario remains for a decline between now and the end of September. If the stock market gets to the end of September without at least a 5% decline, then I am wrong and the window likely closes for a 10% decline until next year. In that case, I think stocks head higher but not powerfully. If there is a meaningful decline, then I think the market could see a 10%+ rally into 2027. In no case do I see a bear market beginning anytime soon.
Finally, how could I finish without a comment on the bond market. On Twitter yesterday, I shared that after a large bond market decline, the financial media was falling over themselves to discuss how bad it was. At the same time, the stock pundits were all over becoming bond experts. That, my friends, is a recipe for at least a tradable low in bonds.
On Monday we bought QLD and more MQQQ. We sold EMB, IAK and some MKC. On Tuesday we bought more MQQQ. We sold some XLU.
