The Big Crash (Sort Of)

by JDH on October 13, 2018

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.