As for the stock market specifically: The short week started off ugly, and it ended ugly, too. The middle of the week was not great either. The bears came out of hibernation and ate multiple percentage points off the major market averages for their breakfast. The moves last week put the Dow Jones Industrial Average slightly into the loss column for the year, so far.
The simple answer was that investors were unhappy with the economic news, with the expectation that the Federal Reserve will do or not do something with interest rates.
The attempted explanations I get from news reports make me pine for the days when we watched the size of Alan Greenspan’s briefcase expand or contract.
We now are coming to the three-year anniversary of the lockdown era. Because of that, the 3-year returns in that column move wildly, and in a manner that will render them meaningless. At some point, I may remember to say they have become meaningful again.
The bullish percent indicators had another bad week. In fact, the NYSE and Optionable indicators went on defense last week. This week starts with a split decision of WEALTH PRESERVATION for NYSE companies and WEALTH ACCUMULATION for OTC stocks.
Remember, X’s mean OFFENSE or wealth accumulation, while O’s mean DEFENSE, or wealth preservation.
Below is where our indicators stand as of February 24, 2023 (Courtesy Dorsey, Wright, and Associates).
On a general note: The National Association of Realtors announced existing home sales data for January. The January sales rate was 0.7% below December to a seasonally adjusted annualized rate of 4 million units. The report noted that was the slowest sales rate since October 2010, and drop of 36.7% from January 2022 levels. The median sales price rose by 1.3% compared to January 2022 to $359,000. That was the slowest annual increase more than 10 years. In fact, the median sales price fell for the 7th consecutive month, and is down from a high of $413,800 in June 2022.
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