There has been no significant change in the economy since our last post of May 14th. The yield curve remains “flat” and there are “rumors” the Fed may “reduce” interest rates.
At the beginning of May, the market “rolled over and fell 8% into yesterday’s (June 3, 2019) close. The China trade negotiations and now the proposed tariffs on Mexico has contributed a great deal to this sell-off as companies earnings season (now near the end) were mostly positive.
There are some ongoing issues with several big named companies basically centered around possible lawsuits and pending governmental investigations that continue to create angst in the market with the Dow sliding 2015 points into yesterday’s close.
However, today, the market has “bounced” (the Dow up 510 points as this is being written) off our “support” numbers (posted on May 14th), 24800 for the Dow and 2730 for the S&P 500.
The Dow closed at 24815 and the S&P 500 made a low of 2728 yesterday. We missed forecasting the possible Dow low by a “whopping” 15 points and the S&P by another 2 points.
Many analysts today, are saying today could just be a “dead cat bounce” and more downside is to come. We here will be monitoring closely the next few days to see if they are right or if an intermediate “bottom” has been put in so the market can once again resume the uptrend that began in January. For now, we are “cautiously” optimistic but prepared for whatever the market decides to do.
As always, we will keep you posted