Today's market sell off has the S&P 500 Index down for seven days in a row. The S&P index has declined 6.8% in this seven day period. A result of this decline is the number of stocks trading above their 50 day moving average has declined to 14%, a level at which the market has rebounded historically.
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| From The Blog of HORAN Capital Advisors |
As we noted in our prior comments and second quarter newsletter, the market does seem stuck in a trading range. Today's decline puts the S&P at the bottom of the range that began in late February of this year. Additionally, the market could be in the process of making a double bottom, if not a triple one.
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| From The Blog of HORAN Capital Advisors |
Lastly, several of the recent economic data points have come in on the weaker side. Confidence has been negatively impacted by the actions in Washington over the last several weeks; however, we believe the weaker manufacturing data points are partly related to the supply disruptions due to the tsunami in Japan. In short, we do not see a strong economic recovery from this point, but we do not see a double dip recession either. We believe the economy is stuck in a slow growth environment, which may not improve until business uncertainty is lessened.
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