Ugly!

Market action has turned ugly the past couple of days with major US indices losing between 3-6% since Wednesday.   Here's a couple of things to think about.

Stocks don't go up in a straight line forever.  A pullback after a strong run is normal and healthy.  It removes some of the froth from the markets.  What we're seeing is pretty typical after a strong run up.  The first few days of profit taking tend to be ugly.  3-10% market declines can be normal in this first phase.  After that a period of backing and filling usually is the reset mechanism for markets to at some point resume a rally.

So far this decline is hitting the high flying technology names the hardest.  Other sectors haven't seen nearly the decline in some of the companies or industries that have been running the show these past few months.

The current decline in the major indices, while steep and fast, has only taken us back to levels were markets were trading less than a few weeks ago.

Irrespective of what we're seeing these past few days, I think all investors need to be prepared for an uptick in volatility as we get closer to the election.

Labor Day means summer is unfortunately over.  Expect to see a few more posts showing up here in the weeks ahead.