Today’s action just a bump in the road
Today’s market analysis is going to be quite brief, because I’m heavily involved in preparations for an investor trade show next week. Fortunately, the market situation in fairly stable, so there isn’t a lot of new information to report.
Today provided the sharpest drop we’ve seen in the major indices for awhile, and most of the decline was attributed to poor retail sales numbers for April. Many investors remember the correction that began last year about this time and are worried about a repeat performance, but there is nothing to indicate that this will be a serious or prolonged correction. While days like this are certainly uncomfortable, keep in mind that so far this year the Dow (gold line on the chart below) has reached record levels on 21 days. Other major indices have also advanced strongly. Overall market health still looks good.
On the chart above, you can see that the Nasdaq (black line) is still well above its 50-day moving average shown by the brown curved line. On the bottom portion of the chart, the Nasdaq’s Relative Strength Index (RSI) is still trending above 50. Since mid-March the market’s rise has been steep enough that a pullback is expected and normal. The uptrend that began then remains intact. The S&P 500 (blue line) is also holding up fine.
Next week Strategis Financial Group will be exhibiting at the Las Vegas Money Show at Mandalay Bay Resort. Our booth number is 429. Feel free to stop by if you are in the area and we’ll give you a free Indian Head nickel minted between 1913 and 1938.
F.S.