Transcript:
Tom Vaughan:
Hello, everybody, welcome to Thursday. The S&P 500 was up a little over .1%, today. We did have some overall weakness and other parts of the market: The Dow was down today. The Russell 2000 index was down a little bit more than 1.2%; that’s the small caps. Oftentimes, when you see small caps having weakness, which we’ve seen for the last about three weeks now, you can kind of see it as a sign that people aren’t willing to take as much risk, and so they’re taking money off the table. We’ve seen some shift up towards some of these larger cap stocks, which is why the S&P 500 did well today, I think. And really, it’s an issue that you have to watch for: When things are very hot, money moves into small cap stocks. As people feel very confident; I think there’s a little bit less confidence right now.
And here’s one of the reasons why, this is kind of fascinating: There was an article in Marketwatch today, about how long it’s been since we had our last 5% downturn. This is what I’ve been talking about quite a bit here: Just how long we’ve gone without any type of really bigger downturn. And so, if we don’t have this by Friday, that will be 200 days, trading days, that’s how many days the market was open, since we had our last 5% or more downturn. And so it’s really kind of fascinating, because that’s only the eighth time since 1957, when the S&P 500 was created; that that has happened.
We did have some very long ones. As a matter of fact, we had one that was 404 days, that ran from June of 2016 to February of 2018. It can go longer, which would be fine, but I think we’re kind of looking at least some type of a downturn here and some softness; we’ll see what happens. I actually think tomorrow is going to be somewhat important, because it’ll kind of set the tone for the weekend: Are we bouncing from here, and just going to continue on our way, or are we going to have some more weakness that we might have here, too. So, something to watch for.
Of course, my thought process always in this, is that the primary trend is up; and all we’re seeing so far as a counter cyclical downtrend. That’s what you have to assume first, and play that basic concept, and then watch for it to turn. So, the primary trend could turn to down: I’d be surprised, just because of all the other basics that are in place. Lots of economic growth and things that are happening with low interest rates.
So altogether, I think things look pretty good, anyway. Very interesting day all together today, but tomorrow I think will be more fascinating. I would like you, if you get a chance, to join me at my Talk Money with Tom show. If you have questions about the market or things that you want to hear about, in that regard. I’d love to talk to you about those, too. And so we have that from 12:15pm to 1:00pm every Friday, and I look forward to talking to you tomorrow. Thank you very much.