Transcript:
Hello, everybody, welcome to Thursday. The S&P 500 was up almost a little bit over .8% today, so it’s three days in a row that we’ve had good up days. And of course, they reached an agreement on the debt ceiling, finally. It is for a short term, and then we’ll see what happens going forward. But, I am encouraged by the fact that there was at least some negotiations and meeting of the minds to make this happen. It makes me feel better going forward that the concept of allowing a default isn’t something that we want to have happen.
So, we have moved all of our assets back in. Three weeks ago, we put a freeze on new monies that have been coming in, and kind of piling up. We don’t like to buy during downturns until we feel more confident, and so that went back into that also. So, really good timeframe. Let me show you something here on this chart they think’s important to watch for kind of coming up next.
And so what I’ve got here, this is a chart of the S&P 500, so far for this year. This is the 50 day moving average, this orange line here. And this blue line is the 200 day moving average. You can see that the price held above this 50 day moving average every time, except for this last downturn. So, of course the debt ceiling default is something to be taken seriously. A lot of people have to take money off the table, just in case. But you can see today, we had a nice jump upward with the announcement. And we got really close to getting back through the 50 day moving average.
So, a couple things that I watch for. Number one, is this consolidation of purchases that happened here over the last week or so. That provides some support, if the price does fall back down. People will usually buy when it comes back to those levels. The other thing I’m watching for, is it getting through the 50 day moving average, because I think once it does that it, has a shot of slowly moving its way up to a new all time high. But the most important thing that I would point out here, is that if you look at the very high point here, and the very low point here, by my calculation: that’s only a 5.9% drop.
So that’s pretty significant, if you think about all of the things that have been happening. Impossible issues with the Federal Reserve, supply chain issues, what’s happening in China, the debt ceiling, and the market drops 5.9%, from its highest to its lowest point, at least on the S&P 500. That shows you an awful lot of strength. And that’s where the positive part of this comes in.
We were able to take advantage of this, and buy in a little bit lower, which is great. But really, it’s very, very amazing to me, that this isn’t down 15% or 20% in that particular environment. And it just shows you the liquidity and how much money is coming into this market, and what’s probably going to drive it forward. And if you look back to my positive Friday comments about three weeks ago, now we can kind of see those portions just starting to come through. If we hit a new all time high, that’s why. It’s because of all those things that are out there that are happening.
So, I really look forward to seeing what’s going to happen tomorrow. Join me for my Talk Money with Tom show at 12:15pm. I start that show off with a summary for the week. And so I look forward to talking to you then. Thank you very much.