Now what?

‘Summer’s over, kids are back to school, and the market tacked on another 11% while we were on vacation.’ ‘Is it too late to buy?’ ‘Should I sell?’ ‘Nothing good ever happens in the month of September, right?’ These are the types of questions that I have been fielding over the course of the past couple of weeks.

Let’s look at what is; During the past week the market averages pulled back and this has made people nervous. Of course we'd all like to see the market go straight up but, just like humans, the market inhales and exhales. During the exhales, it is important to determine if it is an exhale or more like a gasp for breath - like 2008's market.

Using geek speak and info I gleaned from stats 101 - The average S&P 500 component has contracted from 46% overbought on its distribution curve to roughly 20% overbought. What this tells me is that the market pullback was just an exhale. Should we start to see more exhaling we may want to take a more defensive approach but as it stands right now all of our risk indicators for the equity market remain positive, albeit at higher risk levels.

Therefore, while these questions make for good fodder with the media you may rest assured that I have tools to manage your account no matter what the market may throw our way.