As we have previously mentioned, this year most likely would experience some “vigorous” Ups and Downs.” Today (please see attached chart) certainly fits this description being off nearly 1000 points. Of course, the “TV talking heads” (as we refer to them) are once again “blaming” this on the ongoing world-wide coronavirus issue.
Given the market has climbed over 3000 points (3300 to be precise) since October without any meaningful “breathers” (pull-back), this came as no big surprise to us. The analogy we always use is “the market is like a rubber band, when it becomes too tight, it will always spring back” and this is exactly what is taking place.
Where does it go from here?
Our long-term view remains positive and we believe the market will make new highs prior to the end of 2020 but as stated above, not without some increased volatility along the way.
We will share some “support levels” where the market is likely to bottom and once again turn upward. As the Dow Jones Industrial index only represents 30 companies, our more important support levels will refer to the much broader S&P 500 index.
Near term support is 3190 (the close equivalent for the Dow Jones is) 27,750
If the last support numbers do not serve as solid support, we will alert you to a change in strategy.
As always, we welcome you to call our office for an individual review of your account