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Sept. 22, 2023 - In the short term we were “Over Bought”, that is, stocks had a long run up and prices were such that they weren’t cheap any more. Also, leadership was focused on a smaller and smaller number of Tech stocks; not exactly “healthy” overall. Now, in the very short term, we are over sold. Prices for many of those high-flying Tech stocks have come back to a more reasonable price.
What’s next? Likely a bounce up then a re-test of the lows. At that point the market will decide whether to go lower or form a base and rebound. I doubt that any rebound will happen until the first week in October. Why? The United States Congress. The political shenanigans of MAGA Republicans may force the US into a default. Interest rates will rise and the government goes into a partial shutdown. Is that the only thing? No . . . it’s the strong US dollar. The European Union reported weak manufacturing (recession fears) and the Japanese Yen weakened. That strengthen the US dollar (more demand for USA $) and made US companies products more expensive worldwide (lower profits & more competition).
I am now about 50% in Cash and waiting for a confirmed market move lower or higher. We’ve got time to figure it out . . . maybe more time than the Congress has. (Editorial: “Bone Heads!”)
The** Short-Term Sector Strength*** table is shown at www.Special-Risk.net (not much green there)
Have a good & Cautious week. Keep smiling ! ………… Tom ………….