Transcript:
Tom Vaughan:
Hello, everybody, welcome to Tuesday, the S&P 500 was down 1.8% today, and really kind of interesting what’s going on right now in terms of the pricing of the market, if you look really close, if we look at, for example, the Vanguard Total Stock Market Index, which has the ticker symbol VTI, it’s one of my favorite indexes to follow for the whole market is trading in a range over the last three months. So it hit highs of about $245. And it’s his lows about $230. So it’s pretty close to the low today. But there’s some really important things to consider when you’re in a range in the stock market. First of all, the movement between that kind of $230 and $245 doesn’t actually mean a lot. Because you can have a nice run up like we did at the end of last year, hit the top of that range, come right back down to the bottom, like we’re doing now. And so really, it’s the breakout of that range that matters the most. And then, you know, if you break above, let’s say you go to 300, it was a top was 245. And often it comes back down. Well, because they spent so much time in the same price range, a lot of shares were accumulated at the same price. And so the theory is that when it comes back down, that becomes resistance, I mean, support for that price. So 300 comes back down to 245. Somebody say, okay, hey, I made money on it before, I’ll buy it again at $245.
On the other hand, if you break out of the bottom, it becomes resistance. So it goes down to say $200 or something, and it tries to get back when it gets to $230 or what have you. People say Okay, I’m gonna get my money back, because that’s how I bought it. So that’s the that’s the key about this is first of all, we’re in a range, got to be really careful with drawing conclusions and arrange about where the markets going, because you can’t really tell until you get a breakout. And then it will be important as to what happens after that once you get above or below and we’ll have to see which way it goes as far as that goes. So anyway, that’s what’s going on today. I think tomorrow will be kind of important because we’re right at the bottom of that range. So see what happens. Look forward to talking to you about that tomorrow. Thank you.