As you all know, on Wednesday the market “crashed”, or corrected, or went down. Further weakness on Thursday brought the broad averages all the way back to where they were in August.
mid-August.
Yup, we suffered through the “lost eight weeks”. Clearly a catastrophe.
I’m holding a lot of cash, so I wasn’t paying any particular attention to this crash, since it didn’t particularly impact me. Your results may vary.
So what does this mean going forward?
I suspect, not much. In fact, the pull back to the 200 day moving average, which is effectively what has happened, could be construed as a positive development. In other words, a buying opportunity.
My guess is that Trump and the Republicans will do very well in the mid-terms elections in November, picking up seats to increase their majority in Congress. If that happens, I assume the markets will react the same way they reacted the last time he won – by going up.
So I’m not ready to throw in the towel just yet.
The Canadian pot stocks also suffered in this correction, but with partial legalization happening on October 17, and with widespread sales up and running by the end of the spring, I believe that these stocks have more upside potential.
We shall see.
More next week.
Loading ...
Not Over Yet
by JDH on October 20, 2018
So, the “big crash” happened last week, and the world didn’t end. Ho hum.
I’ll keep this brief: the bull market is not over yet. We just observed a nice correction, to allow the Big Boys to load up on more “bargains”, so they can do it all again. Lather, rinse, repeat.
Tesla closed at $260. I assume they will announce decent earnings (which isn’t difficult if you cook the books) which will give the stock one final bounce, and then it’s over. The bankruptcy filing will happen in 2018, and Elon can blame the SEC, or short sellers, or whomever. I have no position at the moment.
Gold has shown strength, but we are not at the “back up the truck” point yet.
The pot stocks lost ground this week. Wednesday was pot legalization day in Canada, so it was time to “sell on news”. That’s fine, a new crop of investors can now jump on the bandwagon now that it’s legal, so after a consolidation period over the next few weeks and months, I assume 2019 will look good. I was filled on some of my below market bids this week.
Otherwise I have cash, and I sleep fine at night.
Thanks for stopping by; more next week.