Ugly Day/Opportunity
Ahh, that's better. More than a little air was let out of the overinflated balloon today. Check out the market stats: declines swamped advances 11:1, down volume 17:1 over advancing, new lows exceeded highs by 4:1. If I recall correctly, the last time that happened was late February when the market fell about 5% in one day. NYSE volume rose to 1.9 billion shares and that is clearly on the high side. Net net, today the market cleared out a lot of fluff and is probably closing in on a bottom. The S&P is about .3% points from its 50 day MA, the Dow about 1%, mid caps about 1%, and small caps just about hit the 50 day line. Transports closed below the line as did Utilities and that poses a striking negative to the "market is close to a bottom" theory.
Of course the rally-interrupted may be searching for the 200 day MA. That would be another 5% down and not out of the question. The fact that the interest sensitive utility index is getting crushed and in a confirmed downtrend is very troubling. Bond yields SOARED today and until the market accepts this as ok or yields settle down we are in for more trouble. The weakness in bonds cannot be overlooked.
Interesting how easily market strength disappears but we must also remember that bull markets should get the benefit of the doubt. I still believe the long term bull is in place and this is simply a reversion to the mean (the mean being the 50 day or 200 day ma). My goal is to put the excess cash in the portfolios to work as early as tomorrow. If the market continues to slide then losing positions that should be sold will be replaced with the better names that have not broken down. Corrections always hurt but they also present an opportunity to clean house and restock the portfolio with the best names. Stay tuned...
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
Of course the rally-interrupted may be searching for the 200 day MA. That would be another 5% down and not out of the question. The fact that the interest sensitive utility index is getting crushed and in a confirmed downtrend is very troubling. Bond yields SOARED today and until the market accepts this as ok or yields settle down we are in for more trouble. The weakness in bonds cannot be overlooked.
Interesting how easily market strength disappears but we must also remember that bull markets should get the benefit of the doubt. I still believe the long term bull is in place and this is simply a reversion to the mean (the mean being the 50 day or 200 day ma). My goal is to put the excess cash in the portfolios to work as early as tomorrow. If the market continues to slide then losing positions that should be sold will be replaced with the better names that have not broken down. Corrections always hurt but they also present an opportunity to clean house and restock the portfolio with the best names. Stay tuned...
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
posted by David Geller at 4:11 PM
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