Thoughts 10.15.18

Markets have opened flattish today.  There's probably some relief in that they didn't give back all of Friday's gains at the open.  Still, the day is young and it wouldn't surprise me if you see some folks lock in those short-term profits .  That could especially be the case, and any selling could pick up steam today, if early weakness persists.

Probability suggest a better environment for stabilization mid-week.  We are still short-term over sold by our work.  I think there is a higher probability of rallying once the market's have factored in the election results.

No, I do not think we are at the beginning of a bear market.  I think there are some headwinds to stock trading but I don't see right now signs of a recession.  That could change and we should get a better idea of how things are doing as earnings season progresses.  I do think right now long-term interest rates above 3.3% {and possibly heading to 4%} is sucking some of the energy out of equities.    I think markets are adjusting to higher rates right now and at some level these will be discounted.  Higher rates are something that now has to be factored into portfolio's asset allocation and investment strategies.  I will have more to speak about this at a later date.

The drop we've seen in stock prices has moved us back into more reasonable valuation levels.  Again, that is a subject for a future post but we're now at levels where stocks have found some support during corrections in this most recent bull run.  Now of course nothing is guaranteed to work in the same manner as the past and valuations can change.  I'm just pointing that current fact out.

I have to be out tomorrow and won't be posting here unless something drastic changes.  Back Wednesday.