Odd Markets
If you’ve been watching the news or checked in your brokerage account today, you’ll see that the market is falling significantly. This comes after a very volatile few weeks characterized by some significant bearish downswings.
In the past, you’ve heard me characterize some of the more volatile periods we’ve had in 2024 as a “confused market”…
Now, the reason I use that language rather than just saying we are getting volatility or a market correction is because the cause and effect in the market is very bizarre right now.
The parts of the market that would typically be correlated aren’t holding up and the areas of the market that would typically be inversely related aren’t moving that way either.
I saw a post on X (formerly Twitter) that summarized this well:
I thought this was a very interesting post and a pretty good summary of the chaos we’re seeing right now. Nothing makes sense in terms of what we expect from traditional cause and effect in the stock market.
Layer on the upcoming presidential election which we’d think would be pumping a bull market this fall (I still think that can happen), but as we are seeing, that’s certainly not the case just yet.
All sectors are down right now across the board… Not a single green bar to be seen today:
Typically you’d expect energy or utilities would be doing well flowing counter to the tech selloff, but they are among the biggest down movers.
We are seeing a lot of confusion and mixed signals out there which I don’t think can possibly bode well for our outlook here.
With that being said, we’ve flushed a LOT of cash out of the market and that’s what needed to happen.
So, I think there is a reason to believe this is “healthy” for the markets. It’s just a matter of how sick the market really is and, therefore, how much of a cleanse it needs (and how long that cleanse will last).
Think of it like a fever when you’re sick.
Why are the markets down right now? I have no idea… Friday’s jobs report was less than ideal, and the futures market dipped some over the weekend.
But that doesn’t explain such a drastic selloff.
There must be something larger going on here behind the scenes… I wouldn’t be surprised if we get some shocking political news or something like that hitting within the next few days.
It’s also possible that this is just the starting of the “other shoe” dropping after a decade of horrible monetary policy and inflating the market with trillions of printed dollars. I’ve called this a “smoke and mirrors” economy for the last few years and I think the reality might be settling in for many.
The next few months should be interesting as the Fed will do everything they can to stop the bleeding and pump some life back into the market.
My official prediction?
A bounce sometime this month and through November and then a deeper correction from there.
But I won’t trade that prediction until I see some confirmation in the markets and I’ll keep you updated as I do.
— Nate Tucci
P.S. Still time to get into this month’s “3 Rivers Portfolio” with the market combing back down. Just $17 for an entire year of active, monthly trade baskets with a target of crushing the market using just 3 positions each month.
