Is this back to the future? Actually, I should ask is this “almost” back to the future? In just two days, the market has clawed, well, that is not the right word. How about in just two days, the market has roared its way back to where it should be, just a little bit down from its record highs.
- After their biggest six-day tumble in three years, European shares have regained more than half of their losses, jumping the most since November 2011 today.
- U.S. stocks rose, after the biggest jump in a year for the Standard & Poor’s 500 Index, as global equities rallied on the Federal Reserve’s pledge to be patient on the timing of rate increases.
Yes, the market had bitten off just a tad more than it could chew well, so it needed to come back a bit. The fall off the cliff it took seemed a bit inappropriate, but from time to time, this is what the market does – it freaks out.
The day is still young, so the market could exhibit some of the ripping volatility it has shown recently, but it feels different today. The price-action is brisk and the numbers seem to be holding on strongly in the green.
As I write, for the second day in a row, the Dow has topped 300 points, which tells me the buyers are anxious. They don’t want to miss the boat, the train, the plane, or the next leg up, for that matter.
The VIX has steadily dropped over the last two days from its intraday high of 23.64 to a reasonable 17.4 or so today, which tells me that even though the buyers are anxious, they are not anxious about the market dropping too far.
I suspect that along with the Fed’s carefully chosen words regarding interest rates (no real rush to raise rates is my take), the market is liking the economic data that continues to look better and better.
- The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market continued to strengthen.
- Consumer confidence rose last week to a seven year-high as falling gas prices and continued job growth burnish American attitudes.
So, did you buy on the dip earlier this week? Did you look up the Clean Energy Fund (CELS), which is up 2.5% today from yesterday’s low of intraday low of 212.88. It is still a ways away from its 52-week high of 283, but it is still near its 52-week low of 217. I see good things for this fund in the near and long-term future.
If the straight line on the chart continues today, then we have found our way back to the future, almost. Almost is okay, though, as the market needs some less volatile time to settle in, to find its place for its future leg up.
Trade in the day; invest in your life …
