The Potential for a Larger Long-Term Move to the Downside Has Increased
Yesterday the market bounced back well from Wednesday’s headline news. Today’s news will be another test as to whether or not the market can handle both terrorism and the Ebola scare in the same week. Overall most stocks are short-term neutral and with so many stocks near their 200 day ma, it’s going to take the reaction to a major event (possibly this one, and the upcoming election) to dictate where prices will be heading longer term.
Please use caution here – there’s a lot of emotion coming from headlines and rumored news which are creating large swings in equity assets. These type of swings are seen ahead of longer-term declines. It’s not fully there yet, especially with prices hovering around the 200 day ma, but with a bull market running in its sixth year and volatility rising, the potential for a larger long-term move to the downside has increased.