What happened last week.
What we're watching for next week.
The market has been weak lately. Should we be worried? A look at the data might help.
Chart of the Week - The Treasury Yield Curve
The Treasury yield curve has inverted again. This indicator has a nearly perfect record of foreshadowing the onset of a recession. It's too early to tell when the next recession will arrive, but astute investors are raising cash to get ahead of it.
Chart 2. S&P periodic returns.
The market is losing steam. No call to action yet but pay attention. Look at the numbers and make up your own mind about what to do, or not do, to protect your assets.
The year-to-date gain has dropped from 17.5% to 12.7%. No big deal but worth watching. And the market is only up 3.6% from 12 months ago. That's down from 17.5% recently.
Chart 3. Tracking the S&P 500 Over the Last 30 Days
The above chart shows that the upward momentum is sputtering. It could pick up again, but what will the catalyst be? Think about it.
Chart 4. The Percentage of stocks
still above their 50 day price average.
Final Thoughts
The market is still controlled by the bullish camp. The fact that it's down 4% from its recent high doesn't mean much. But how much more upside do you think there is? The Elliott Wave guys say the market could rally to 4,000-4,400. I say 3,000-3,200 is more realistic.
Stay safe out there and don't forget your umbrella.
If you want more info about how to set up a solid Plan B, send me a message at info@zeninvestor.org
For a full analysis of the probability of a bear market or a new recession, see my Monthly Intelligence Report.
As always, if you like what you see, or have suggestions for improving this recap, leave a comment below, or email me at info@zeninvestor.org