The markets continue being weak for today. All indicators are pointing to more weakness and yesterday’s rally was just a bounce attempt. It seems that more bearishness will be on Wall Street with more and more bears (and media) coming out with all sorts of doom predictions. The most prevalent prediction out there is that the stocks are set for a crash. Didn’t we just went out from a year long bear market?
Many studies I watch show however, that this weakness is perfectly normal and to be expected. And on top of that, we can expect gains to follow. Of course, once we clear this pullback.
Investors are still reluctant to be buying at the current levels. The markets are down about 2.5% and the investors wish for at least 5% pullback to buy back. But savvy long-term investors do not sell but buy. If you choose a good quality company, you do not need to trade it. You buy it, and then enjoy the life-long ride. And days like this one is perfect to be adding to your portfolio.
Given that the rally yesterday was weak and with no volume, I expect further weakness today. But we may see a better day tomorrow as the investors may start positioning their portfolios for the latest CPI (Consumer price index) report due on Thursday. Today, more weakness brings the market to the short-term oversold territory.
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