My last two commentaries were spent on the very topic that is unfolding now. That the S&P 500 (SPY) seeming breakout above 4,200 was premature with a likely pullback to follow. And then how the market goes through a normal cycle to wash out excess, which helps store up energy for the next bull leg higher. So for as much as I hate repeating myself, I will need to do a bit of that this week to get your heads properly wrapped around the current market environment. And thus prepared for what lies ahead. Read on below to find out more….(Please enjoy this updated version of my weekly commentary from the Reitmeister Total Return newsletter).
As shared in Friday’s commentary, the break above 4,200 was not as solid as it seems. Sure enough the script was flipped Monday with a pretty broad based market sell off with the S&P declining over 1% to a close of 4,188.43.
Even worse was the tech stocks in the Nasdaq down -2.53%...and even worse was just the state of all riskier, smaller, growthier stocks in the Russell 2000 down -2.59%. And yes, the downward trajectory continued Tuesday with the S&P being trimmed by almost another 1%.