Craig Johnson’s

Stock Market Summary

Monday, March 26, 2018

  • Last week, the stock market had a rough week with the major market indices declining 4.5-6%.
  • The weakness spread across the broad market with growth areas being especially affected by the selling.
  • Weakness in technology and semiconductors coupled with a sharp drop in financial and manufacturing stocks, which have been market leading groups, all contributed significantly to the decline.
  • Market sentiment indicators, which are viewed from a contrarian standpoint by those who use them, registered levels of extreme fear last week. Interestingly, already this is the third time this year extreme fear levels have become so excessive that they reached levels not seen since early 2016. The excessive extreme fear level in 2016 occurred at the end of the seven month bear market that stocks had struggled through.
  • Following last year’s lack of volatility in the stock market any pullback with momentum seems to generate very high levels of fear that the market is at the beginning of a very large decline.
  • The selling last week makes caution prudent for this week, with this being a holiday shortened trading week. This is also the last week of the quarter. It is always better to let the market tell us what direction it is headed rather than trying to predict what it will do, especially in the short term.
  • The short term trend is lower, while the intermediate and long term trends are higher for the stock market.

 

 

Sources: bankrate.com, bloomberg.com, Dow Jones News, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, individual company web sites and press releases.

Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice.  The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness.  References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service.  Past performance is not a guarantee of future results.

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