Your Wednesday Blip 6/10/20

Your Wednesday Blip 6/10/20

The Dow pulled back for the second day in a row dropping 118 points to close at 27,154. Trading volume rose making this a distribution day. Meanwhile the NASDAQ gained 114 points on lighter trading volume and closed over 10,068 for the first time ever. Tech stocks continue to lead the way but the volume trends suggest near term weakness in the markets.
Bespoke investment group looked into the history of rapid market rallies similar to the one we recently had and found some interesting tidbits of information. The recent 39% rally over the past 50 days is the biggest rally for a 50 day period in more than 75 years. The study showed that whenever the market has rallied that far that fast it usually has enough umph to tack on more gains. Bespoke found that in all cases these short term massive market spikes turned out to be the start of a multi-year bull market. While this is good information to have it does not mean that everyone should go nuts but rather should maintain a balance of safety and growth assets that align with your risk profile just in case history changes its tune and writes a new chapter.
While markets have come up there remains three main risks. One is the risk of inflation caused by all the money injected into the system. Another is the risk of the Federal Reserve (aka Uncle Sugar) pulling the plug on its bond buying program and raising rates and the third is a possible new wave of virus infections leading to another lockdown. The gurus are keeping an eye on all this and even Dr. “The Kid from Brooklyn” Fauci issued a warning saying we are not out of the woods yet.
The scout troop is restarting our venture crew and will have our first zoom meeting Thursday. Our old crew leader was great but she fell in love with some guy last year and bolted like a turkey through the corn leaving the kids high and dry. However we have found a former lunkhead and Troop100 eagle scout to take over and excitement level is high. The days will be packed!