Transcript:
Hello, everybody, welcome to Wednesday, the S&P 500 was up .2%. Today, dow is just barely up .03%, that was a really great day. And the reason was, if you take a look at the Russell 2000 index, it was up almost 2% today, so 10 times higher than the S&P 500 index, it’s important to kind of watch all the different parts that are going on, in my opinion, at least see what’s happening with the Treasury yields, with oil, with the cryptocurrencies, all of those things.
But the Russell 2000 Small Cap Index moving that much, compared to the rest of the market, sends a signal to me, and it’s something I’ve watched for throughout most of my career, which is just when people are really willing to move into that small cap area, it means that they feel confident, there’s some, abilities for the market to maybe move forward. And people are getting more aggressive in that regard. Now, people are really nervous, you’ll see just the opposite. They’ll see a flood to the large caps and more stable stocks, those types of things. So when we get some more aggressive buying, that often leads to some nice returns. Not always, but it’s one of the things that they do watch for as far as that goes. So I thought that was very exciting.
We’re also seeing a very significant move in the stocks that did well last year. So the clean energy, the innovative technologies, that the ARK funds with Cathie Wood, you know, the genomics and all those different types of things. Now, those all peaked out in the middle of February last this year, and we’ve had probably 20 to 50%, downturn and all of those. And so one of the strategies that that I always try to use is, I don’t want to sell out at the top, because I don’t know where it is. I usually want a little bit of proof, so that’s why we put in stop losses under all of those things and got out way before those got down 20 to 50%, which is great. But that same things when you buy.
So some people will just say, “hey, when it gets to this price I’m going to buy.” Well, they have a saying on Wall Street, “Don’t try to catch a falling knife”. That seems really good advice, actually. And the thought process there is that just because it’s down 20%, what proof do you have that it stopped? And so that an awful lot of people bought, a lot of these clean energies and things and they’ve gotten hammered further. But we have seen kind of a big stretch. So again, it’s kind of that rubber band, it stretched really far down. And now we’re starting to see another bounce probably about the third or fourth one for most of these, which again, eventually one of them will be the bottom. And we’re then I watched for some of the other things to happen on the way back up. Do they get through certain barriers, so they hit some of the resistance that’s above too, they get through that?
Well, yeah, some of them did today, actually. And that was kind of significant also. So we’re seeing some kind of aggressiveness come back in. We saw small cap value do really well today, and as well as the growth. So it was a really good day, actually. And we’re seeing some motion. The Federal Reserve has been running around talking about how they don’t think inflation is a problem that they think they can handle it, even if it is an issue and what have you. So that seems to have helped also, so kind of that Goldilocks period where the economy is growing well, but not too fast, right?
And so that that’s what was seeing what was happening today, we saw the 10 year Treasury yield, softened up a bit, which is a good thing, I think right now for these for these particular stocks. So, really interesting day, I think today could be a day we look back on and say, “hey, that was something interesting”. So let’s see what happens tomorrow. And again, these are the types of things if you want to come to the to the live stream, we’ve been having a blast, we get a lot of questions. Again, you can kind of listen to those questions, if you want or throw some questions in, we have a little email address that you can send the emails to. So that’s at 12:15PM on Fridays, Pacific Standard Time. So look forward to hearing your questions, and so think of things that you’d like to know about and we’ll get through to those. So, look forward to seeing you tomorrow and talk about what’s going to happen to the market. Thank you.