I don’t have much to say about today’s market activity other than the dust is billowing again and the thunder of hooves is still loud. Fear, rational or not, is driving the herd toward the cliff, again. I am not even sure why the market took such a hard fall this morning – Amazon?
I guess China (as usual) and political instability in Ukraine and Turkey, as well as an investment flight in the other emerging economies (approaching $2 trillion now) is the underlying cause, yet these problems existed yesterday, didn’t they? Maybe the bears took yesterday off.
Today, however, the bulls have taken flight. Across the globe, stock markets are down. It is truly a global sell-off and the headlines out there prove it.
- U.K. Stocks Decline, Heading for Worst Month Since June
- German Stocks Drop, Heading for Worst January Since 2010
- European Stocks Drop, Head for Worst January Since 2010
- Canada Stocks Fall With Oil as Emerging Markets Continue Slide
- Emerging-Market Stocks Extend Biggest Selloff Since 2008
Given the spate of bad headlines and given the breathless media has a bone, the advice below is something to consider.
- If the S&P were to break below 1770 to any meaningful degree (below 1760 for example), one could argue that the crisis is indeed affecting the U.S. market and moving to a defensive position until the storm blows over might be a good alternative.
Folks, there are problems in the world and the emerging economies are experiencing one now as investment money flees those countries. But, don’t join the herd heading for the cliff. Step aside, let it pass, and wait. Consider the action in the market a correction, which means preserve your cash to get back in when the pounding stops and dust settles.
Trade in the day; Invest in your life …
