Broad Market Outlook
The wall of worry continues as the SPY puts in a textbook pivot low under $435 on Thursday and has nice follow through Friday. As the trend continues of higher lows and higher highs it pays to follow the trend.
Each day the market will try to distract us with all the reasons why we should not follow the trend. Sometimes we can brush them off, as this is often an easy feat when the market and our confidence is flagging near highs.
Yet when the opposite is true, those distractions start to seem much more serious when in reality they rarely are.
We have about two more weeks until the paint drying end of summer market comes to an end.
As more investors return to there computers we should expect to see volume come in.
Start stretching that mental capital because as these pull backs get smaller and smaller eventually that trend needs to break (a bigger pull back).
The most recent pull back was a measly 2% off all time highs, the prior was a tiny 4% pull back from its high at that time, the one in May was just about 5% and the one in March just cracked 6%.
All of 2021 we have yet to see a correction (10% drop). As market participant continue to enjoy the candy the market gives out as we inch higher and pull back less and less. When the bag of candy get pulled away, those corrections feel much more painful then the reality of a correction.
Be open minded to when the next correction comes and it won't scare you as you know its all part of the game. We need pull backs to propel us higher.
From Ben G
Macro Rotation Outlook