Everything's Down: What Up?
Stocks hit a wall the last two days. Bonds have been buffeted recently. In fact, most items are red on my screen. Just about everything's down. What's up!
Could it be that a lot of items have simply been richly priced - and for a long time - and we're hitting the day of reckoning? Maybe, but not likely. Of course, items have been richly priced, but "day of reckoning"? Hardly. And some correction - especially in the stock market - shouldn't be a surprise. Of course, given the lack of any meaningful corrective action for I-don't-know-since-when, a drop like today's 362 points on the Dow can feel like a sharp slap on the face. But, let's face it, it's no big deal. SPY has declined a mere 1.7% from its recent all-time high. Any correction worth its salt needs to be more than that, wouldn't you say? No, if there's going to be any real correction, it's yet to come. (And we're not talking crash, or bear market, or anything - just a meaty correction in this extended bull market.)
On the other hand, short-term, it will be interesting to see the reaction of the stock market - now that's it's down a bit - to Trump's State of the Union Address, which just so happens to be on tonight. If the market turns around, Republicans will credit Trump. If it goes down another time, Dems will do a tap dance. Just remember that it's unlikely the reaction will have anything to do with the speech.
The fact is, if the market's oversold, there will be a snap back - even if it's ultimately going to decline further. It's hardly ever the case that things go down (or up for that matter) in a straight line. If the market's not quite oversold yet, it will likely push down a bit harder until it is - at which point we get a snap back. Save yourself some time and potentially frustration or annoyance and just ignore all the potential chatter about the action of the stock market from the political class.
As for the speech, it starts at 9 PM and will likely run on until after 10. If you're planning to watch, have fun. I stopped looking at these things during the Clinton years, tried to focus during Bush's term, failed, and completely gave up when Obama had his run. It's been fine skipping the thing. You can read it if you're interested, and get highlights from your reliable media sources (if you've got some). You can even have fun reading or listening to those whose political leanings make their reactions and interpretations completely predictable - unless you've got a busy day planned which it looks like Wednesday will be on this end.
So for now, sit tight. If the market's going to move in any meaningful way, the best (or worst) is yet to come. (Although it is a bit unusual that everything was down today.) As for the political banter, if it floats your boat, go for it. Otherwise, a good 8 hours sleep might be a better fit.
Could it be that a lot of items have simply been richly priced - and for a long time - and we're hitting the day of reckoning? Maybe, but not likely. Of course, items have been richly priced, but "day of reckoning"? Hardly. And some correction - especially in the stock market - shouldn't be a surprise. Of course, given the lack of any meaningful corrective action for I-don't-know-since-when, a drop like today's 362 points on the Dow can feel like a sharp slap on the face. But, let's face it, it's no big deal. SPY has declined a mere 1.7% from its recent all-time high. Any correction worth its salt needs to be more than that, wouldn't you say? No, if there's going to be any real correction, it's yet to come. (And we're not talking crash, or bear market, or anything - just a meaty correction in this extended bull market.)
On the other hand, short-term, it will be interesting to see the reaction of the stock market - now that's it's down a bit - to Trump's State of the Union Address, which just so happens to be on tonight. If the market turns around, Republicans will credit Trump. If it goes down another time, Dems will do a tap dance. Just remember that it's unlikely the reaction will have anything to do with the speech.
The fact is, if the market's oversold, there will be a snap back - even if it's ultimately going to decline further. It's hardly ever the case that things go down (or up for that matter) in a straight line. If the market's not quite oversold yet, it will likely push down a bit harder until it is - at which point we get a snap back. Save yourself some time and potentially frustration or annoyance and just ignore all the potential chatter about the action of the stock market from the political class.
As for the speech, it starts at 9 PM and will likely run on until after 10. If you're planning to watch, have fun. I stopped looking at these things during the Clinton years, tried to focus during Bush's term, failed, and completely gave up when Obama had his run. It's been fine skipping the thing. You can read it if you're interested, and get highlights from your reliable media sources (if you've got some). You can even have fun reading or listening to those whose political leanings make their reactions and interpretations completely predictable - unless you've got a busy day planned which it looks like Wednesday will be on this end.
So for now, sit tight. If the market's going to move in any meaningful way, the best (or worst) is yet to come. (Although it is a bit unusual that everything was down today.) As for the political banter, if it floats your boat, go for it. Otherwise, a good 8 hours sleep might be a better fit.
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