What’s Driving the Stock Market?
10 Things You Can Do To Prosper In The Current Market
After a significant down move in the stock market in April (S&P down -7.6%), May did not start off much better. The markets plunged -4.8% until Friday (May 13) and reversed course and sustained a rally up over 2%. The immediate reaction from many of the talking heads on TV financial shows Friday afternoon and from analysts everywhere is: Did we put in the bottom?
It is very typical in a deep correcting market (only the Russell 2000 and NASDAQ are actually in bear markets down 20% or more at this time), to get a significant corrective wave up. We may have actually started this wave on Friday, but how long it will last and if it will endure is anyone’s guess?
While we (and nobody else for that matter) really know if that yet happened, our first reaction is emphatically NO! Most of the major indices (S&P 500, Dow, NASDAQ Russell 2000) all have had a lot of damage done and are in bearish phases.
Actually, more value has been lost in the NASDAQ index than even the Dot-Com crash in 2000-2002. See the chart below:
What’s Driving the Markets?
As we have stated on numerous occasions in our most recent Market Outlook posts, behavior in the stock and bond markets is often reflective of WHAT IS EXPECTED TO OCCUR in the future and not what is going on at the moment.
We are introducing a new MarketGauge Pro Overview that will be updated bi-monthly and available to our subscribers. It contains 10 Macro View Indicators that complement our Big View and give a snapshot of what is occurring currently that may be weighing on or propping up the stock markets (and certainly the bond market as well).
To review these 10 macro-economic indicators and 10 ways your portfolio may be able to prosper during this time period, please click here.
By Donn Goodman and Keith Schneider