© Reuters. What to Make of the Recent Stock Market Pullback?
I had written up a commentary that I intended to send out this morning that was going to focus on some bigger-picture, strategic items related to market cycles and developing optimal buy and sell rules. But this notion was destroyed faster than yesterday’s pecan pie, when I glanced at the market futures. Today saw more than a 2% decline for the S&P 500 (SPY) and a more than 3% pullback for the in a half days’ worth of trading. So today’s abbreviated commentary will focus on this drop. And then, we will address the elephant in the room – is it the culmination of the market’s rough patch which we discussed last week, or the start of another leg lower? Read on below to find out more….(Please enjoy this updated version of my weekly commentary published November 26, 2021 from the POWR Stocks Under $10 newsletter).
In last week’s commentary, we discussed that the S&P 500’s 1% gain was masking weakness under the surface as the Russell 2000 was down by 2%. And, these trends got only more extreme as the S&P 500 is down by 2.4%, while the Russell 2000 is down by 5% since last Thursday.
Of course, the bulk of the selling took place today in an abbreviated trading session. The biggest reason was reports of another coronavirus variant, B1.1.529, that is spreading rapidly in South Africa at much faster rates than previous variants. Some cases have been identified in Europe and parts of Asia, and there are doubts about the vaccine’s efficacy against it.
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