What’s going on in the world…
Market opens in the green, trying to bounce off simply weak levels after the worst Christmas Eve session ever. This has been the worst December ever for stocks as well. 70% of the S&P 500 components have reached Bear Market levels, meaning they’ve declined 20% or more from recent highs. It’s been that bad. But are things really that bad? The answer is yes, until this Market can demonstrate an ability to hold rallies and build on them. Every rally has been sold. Some only have lasted hours before selling knocked them back. The selling has been global. Japan’s Nikkei fell 5% yesterday. It bounced a little, with a 1% gain today. Both Presidents Trump and Abe came out and talked up fundamentals trying to provide encouragement that the weakness is a buying opportunity. Other positives this morning are retail sales, which jumped at the highest rate in 6 years this holiday season. Crude Oil is jumping this morning, providing more fuel for an oversold rally. Crude has been absolutely clobbered since September. Gold continues to catch a bid, hitting a 6-month high. The precious metal has been one of the few places to hide in this brutal environment, which has helped our portfolios immensely. It’s going to be telling to see if this early rally can hold. Year-end tax selling is likely still in process, and all of a sudden, the losses are more substantial from the December drubbing. Rallies are to be sold until proven otherwise. That’s our approach.
Have a great morning,