Weekly Economic and Stock Market Commentary – August 23, 2021
As for the stock market specifically:
I don’t know if those items mentioned in the opening paragraph are the true reasons for a loss of about 1% for the week. However, I do know that moves of 1% off record levels are not things to lose sleep over.
I mentioned many times over the past that when the bullish percent indicators change directions many times in a year, we tend to have a bad year. With four months remaining, that is not the case thus far this year.
I also noted multiple times that fewer stocks are supporting the higher market averages. These things tend to be dangerous.
Another item cited regularly this year is that the markets seem to rise when on defense, and give up points on offense.
As if on cue, we are having a good day after the market risk sensing bullish percent indicators turning negative last week.
In the 1980s, a musical group known as The Talking Heads released an album called “Stop Making Sense.” When it comes to investing in 2021, things aren’t making sense.
This looks like a good time to bring up another Wall Street adage.
“The market can remain irrational longer than you can stay solvent.”
It was a rough week for the bullish percent risk indicators. I don’t see a reason to make major moves at this time even though we are on defense now, and WEALTH PRESERVATION for all markets followed. (I have my reasons, but you’ll either have to trust me, or simply give me a call if your curiosity is running wild. Hint: it has to do with the largest of U.S. stocks.).
On a general note:
The Federal Reserve released the minutes of the meeting they had in late July. The notes show that the group believes they can stop buying bonds later this year. The markets have been doing fits over the taper tantrum for some time. This seems to be more of a ploy than a strategy.
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