Transcript
Well, hello, everybody, welcome to Thursday, the S&P 500 was up almost 1% today, which is great, considering you know what happened yesterday. But, I want to make some points about where I think the market might be going. I think it’s probably going to come down a little bit from here. And I think that’s a good thing. So let me let me share my screen and I can show you why.
So first of all, this is the chart we looked at yesterday, you know, this is the Vanguard’s version of the S&P 500. You know, all of the moving averages are up, so we’re assuming an up market. But we had this pretty big down day. And so today, let me zoom in just a hair here. Today, you can see, you know, this little tail on the other side just means that it went higher, and then fell back down. And I’ll show you that in just a moment. But when you get these big types of down days, like you had here, if we go back again, to take a look at, uh, you know, the fuller picture, oops, sorry. You can see, you know, here’s a big down day, you know, obviously led to some more downs, here’s another big down day, still got lower here, eventually, you know, when sideways, big down day, finally, you know, so big down day, et cetera.
So when you have a big down day, again, it’s like I said yesterday, it’s kind of like, you know, you got a wound in your leg, it’s hard for you to run, and we’d like them to run. But honestly, when they run, if they keep running too far, you can get much bigger downturns. And I’d rather have, you know, these type of, you know, 5 to 10% downturns to kind of take the edge off of these huge run ups that happen, then have this continue to go really far and end up with a big 30% downturn. So I still think that we’re going to see this come down and into this category down here in terms of price. And, you know, again, I’ll show you just real quickly what happened today. So this is that same security by the minute for the last two days. So you know, there’s yesterday, and after hours, it was up a lot. But you see how it kind of keeled over here, too. So that’s another sign in my opinion, that will probably have, you know, potentially a poor day tomorrow.
But here’s why I think it’s so important. Number one, you have to let the steam out of you, you can’t just keep stretching that rubber band forever, you have to be able to kind of let this settle. And you know, a big part of the run that we had here came from this portion here where it was settling. And that’s really important for a healthy market, especially one that might be able to do really well all throughout the year, to be able to have some periods where it can go sideways, or can go, you know, back a bit as far as that goes. So don’t be afraid of that, I think it’s a good thing, you know, a really aggressive investor is actually putting in a buy order down here. You know, those types of things, I don’t do those types of things. But that’s, that’s essentially what I would look at. I have been watching charts like this for 35 years. And I have very rarely seen where you have kind of this big, psychic toll type day happen, where it just goes straight back up. I can’t remember that happening. There isn’t an example of it even here on this particular chart for the last year either. But I can’t remember that happening. So the normal pattern would be, hey, we have this kind of day, you often get a secondary bounce, maybe the day after, but you know, we’ll probably float around here someplace for a little while, which would be a great scenario, you know, it could go farther down, you saw these went, you know, 7,10 percent each. Again, nothing wrong with those. That’s a normal part of the market process.
And I think, you know, it’s a big, big piece of this, if you really want it to go, you need to get that price down. So that things are look like they’re on sale to a group of people, and they’re willing to come in and really run that price back up again. So if we want to get you know, up here somewhere at some point in the future, we need to probably see price consolidation, a little downturn. I think that’s really, really powerful. Honestly, these periods where it goes straight up, they’re exciting, but they actually scare me more than what’s happening right now. What I see right now is just kind of this consolidation that I think is very, very much healthy part of this particular market. So anyway, that’s what’s happening today. Let’s see what happens tomorrow should be very interesting.
I do think there’s a good chance that, you know, over the weekend, people settle in start to see, you know, clean energy hasn’t been doing that. Well, this week, you know, GM just announced that they’re going to try to get to all electric cars by 2035. You know, I think some of those things are going to start to perk, maybe we’ll see clean energy run again, too, because that’s a big piece of our holdings. So let’s be very interesting. See what’s gonna happen tomorrow, and what’s going to start on Monday, as far as that goes. So we’ll talk to you tomorrow. Thank you