Friends
Don’t hate me for saying – we needed this. The stock market took a tumble today, and in all truth, it probably is a good thing in terms of the long term health of the market. We’ve talked about how many high flying growth stocks seemed to go up 10% a day. Folks, that is not normal. As we have mentioned, we’ve been knee deep in silly season for the last few weeks. Sure, stocks rallying off those March lows made sense, given that the economy was going to open back up and many people would be going back to work. But, Nasdaq had risen 74% since the March lows and more than 30% for the year. The S&P 500 was up more than 50% off the March lows. No, the Fed liquidity has not dissipated, there’s still plenty of money that can make its way into stocks. Remember we had a day like this back in June. Nowadays, a pause that refreshes can be very dramatic. Nevertheless, whatever the form it takes, we needed a pause to at the very least digest some of the gains from the past few months, and at the most take the froth off the top of this market.
By the close, the Dow Jones Industrial Average was down 807 points to finish the day at 28,292. The S&P 500 was down 125 points to close at 3,455. The Nasdaq Composite Index was down 598 points to close at 11,458. Gold was down $5 to trade at $1,939 per ounce, while oil was down $.20 to trade at $41.31 per barrel WTI.
We’ll see if there is follow thru on today’s move or was it just another one day phenomenon. We get the jobs number tomorrow, but I really don’t know if that will have any effect on the market averages at this point. Greed had reared its ugly head in the past weeks. Will fear now dictate for more than a day? Stay tuned.
Have a nice evening everyone.
