While we are unsure of what the next few weeks look like for the stock market as we work through putting in a tradeable low, we feel confident that when the fog clears, the trend will ultimately resume higher. The average S&P 500 decline in midterm election years is 18%. Midterm election sell-offs have proven to be great buying opportunities with stocks up an average of 36% one year later. We are very bullish on the economy, moderately bullish on equities (the economy could outperform the … View More
Markets rebounded Last week on positive economic data and stable interest rates. The CBOE Volatility Index (VIX) fell 33% as a sense of calm followed the recent selloff in stocks. Already, the 10% market correction has been cut in half; the S&P 500? Index ended the week down just 4.9% from its January 26 high. The recent pullback was exacerbated by strategies betting on low volatility; the 250% spike in the VIX triggered trading algorithms to unload stocks. That selling pressure app… View More
Markets recovered somewhat on Friday after a significant selloff last week as all of the major indices briefly entered correction territory (i.e., declines of 10% or more from their most recent highs). Last year US stock markets experienced the least volatile year on record, hitting new highs seemingly every day. Then came the tax reform bill to end 2017, and a huge January with the S&P 500 rising 5.6%. Investors, especially individuals who finally became convinced that the rally would… View More
January was an impressive month to say the least. The return of the S&P 500 was +5.65%, which is the best January since 1997, and the fifth best January since 1980. With the market reaching new highs during this, the second longest bull run on record, many investors are wondering if now is the time to take their gains and get out of the market. The equally strong pullback in the first week of February is adding to some investors’ concern. This month, we want to address this questio… View More
There has been a lot of discussion about the stock market’s losses over the last week, the rise in interest rates, climbing inflation, and of course the “sharp” increase in volatility. We wanted to put these items into historical context. The charts below begin on January 19, 1993. We chose this day because it’s the day the Chicago Board Option Exchange introduced the VIX (the Volatility Index). We have broken down the various data points into multiple charts to make it easier to… View More