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Market staggers along…downturn could occur SUDDENLY

The Market has once again shown resilience and recovered half of last week’s losses.  Whether it moves up or down is anyone’s guess.  I’m not being facetious when I say that forecasting conditions are in a “flip a coin” mode.  While the market has been displaying extreme resilience over the past few months, the price-action has been less than supportive.  In recent weeks, selling volume on down days has been much higher than on up days.

So while the S&P 500 remains range bound (fluctuating between 3000-3200), I remain prudently cautious.  Should investor sentiment degrade, market conditions could deteriorate rapidly. 

Note the attached chart.  When COVID fear solidified on March 4, it took only two weeks for the Market to drop over 28%.  The S&P 500 is currently staggering back at those levels. If the 200 day moving average (dma) doesn’t provide support, then a ~10% drop is likely (2700-2800 range).

Will the 200dma hold?  Flip a coin.

For additional commentary, please listen to today’s episode of the Wealthsteading Podcast:  https://www.wealthsteading.com/314

FYI- July 4th is the Wealthsteading Podcast’s sixth anniversary.  Be sure to tune in for a review of the 10 Wealth Building Principles.  Let me know if there are some additional topics that you’d like discussed during our anniversary celebration.