Of course, a hurricane is coming to New England this weekend. After years of denying we needed a generator, I took the plunge in March, only to find out that one tiny part was on back order until June. Then it was July and now August. Lucky me, the part came in this week, but the electrician cannot do the install because he is busy getting generators ready for the storm. So, I am sure that we will lose power this weekend and it will be for a long time.
In the markets there are no hurricanes present. The S&P 500 is three days removed from its all-time high and the pullback has been mild to say the least. If and when the stock market closes below this week’s low point we can then discuss a more pronounced pullback along with magnitude. For now, all of the warning signs I have been discussing this month remain in place. The stock market is not behaving well, but the bears have been unable to make any meaningful downside progress.
When I look at the big stock market indices I see a few stocks that dominate. That’s nothing new. It’s Microsoft, Apple, Amazon, Facebook, Google, etc. While other areas of the market like materials, industrials and energy have suffered 10-20% declines, the indices are being held up because of tech’s complete dominance. If the mega tech stocks begin to rollover, that could spell challenges to the indices. However, I keep hearing the pundit nonsense that investors won’t sell; they will just rotate to other stocks and prevent the market from correcting. Not only is that idiotic, but it’s also how larger declines unfold.
If you’re in New England, stay safe!
