Volatility

The Bull wrote in this blog some time ago that volatility was likely to pick up; and it has. Money flows into stocks have not been expanding along with positive price increases. This can forewarn of a correction or unsettled markets or both. The most recent catalyst for selling has been a quick rise in interest rates and increasing concern about inflation. Interest rates continue to be extremely low, but investors fear the start of a trend.

This is probably an over-reaction but is exacerbated by the fact that money has been leaving the market as measured by money flows. The Bull does not believe this bout will result in a serious setback. This type of action is normal and probably should be expected after such a consistent run up in the averages since the beginning of the year. The underlying positives, such as tremendous fiscal and monetary stimulus, along with mass vaccinations against Covid-19 are still in place. Stay steady my friends.

The Lonely Bull