I dislike the term stock market “correction”. It sounds like the markets were wrong and needed to be corrected by someone. But for lack of a better term a correction is defined as a 10% pullback in stock prices, we are there. A Bear market is a 20% decline in stock prices.
With the oil markets and overseas markets in freefall this does not bode well for the US stock markets. Today we blew through the August 24th 2015 lows. This was a warning signal. The US markets are down over 11% year to date; a very rough start to the New Year. The stock markets could drop another 10% before this sell off is over. That would put the Dow at about 14,000. If you are fully invested and don’t need the money right away, and don’t mind the volatility; staying in at this point might be your best option? If you are not invested wait for the dust to settle. Oil appears to be leading the markets lower globally. So far today oil is down over -7% at $26.42 and the markets are down about half of that over -3%. There is still a few hours left for trading, hopefully the markets will begin to rally near the close. At some point oil and the markets will bottom and then present a great buying opportunity.
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