Friends
After closing strong last week, and shaking off an early stumble on Monday morning, the bulls were just starting to emerge from the shadows and search for signs that the storm clouds might be clearing. Well, no. The bears were back in charge once again today sending the bulls scurrying back into the shadows. Stocks were down early and continued to add to the losses as the trading session wore on. Ironically, earnings season has been less horrible than had been expected, but another difficult day for oil proved just too much for the markets to handle.
By the close, the Dow Jones Industrial Average was down 295 points to finish the day at 16,153. The S&P 500 was down 36 points to close at 1903. Gold was up $1 to trade at $1129 per ounce (just a thought, if gold can’t rally when interest rates are falling to less than zero around the world, what will make it rally?- I know, U. S. dollar strength is a headwind), while the aforementioned oil was down $1.69 to trade at $29.93 per barrel WTI.
In a bear market (and yes, this is a bear market) rallies tend to get sold. Remember, during the bull run of 2013 to 2014 every dip was bought- now we are seeing the opposite. So far this has played out somewhat classically – a broad breakdown, then finally the market leaders get sold, sentiment collapses, rallies fizzle, expectations continue to be lowered, and then finally despair and give up. We’re not at that final phase yet, but things are proceeding normally. For those who have new money to invest each month, buy into the lower prices – you will be rewarded. For others, if properly allocated then it is simply time to keep emotions in check. We have seen bear markets before (in different shapes and sizes) and we will see them again along our road to financial success.
Have a nice evening everyone.
