The Bottom In?
The U.S. stock market may have made the bottom in the recent correction on Christmas Eve. Since then it has been recovering. Two important things happened; the Federal Reserve indicated that rate increases may not be as automatic as had been signaled previously and our government and China are negotiating a settlement in the trade war.
There may be a retest of the lows, but that is not a given. The classic case would be another decline approaching the most recent low with less volume and fewer stocks breaking down. That could be brought about by a breakdown in the trade negotiations or some other surprise event. Complicated and difficult discussions often culminate in one party threatening to pull out at sticking points.
Nevertheless, it now seems stocks are being analyzed on their individual prospects rather than simply being liquidated to reduce overall risk.
The year-end earnings will soon be announced as well as commentary about each company’s prospects. We expect good results; we will see. Riverplace Capital stayed the course through the correction, making some upgrades. We continue to look for opportunities; stay steady, my friends.
The Lonely Bull