The S&P 500 dropped 3.11% yesterday and is now 7.57% below its January peak. On a short-term basis, the stock market is deeply oversold again, which means some type of rally is likely to develop soon. The problem is that the intermediate-term trend is now down. It may be early next week before we can make a reasonable guess about the longer-term significance of the January top in the stock market.
Our Low volatility bond / income funds have held up very well. Make no mistake, these funds can and will trend lower if the stock market continues to decline for an extended period of time. We have a sell discipline in place to protect us should that occur. So at this point all we need to do is relax and let our moving averages stop strategy do its job.
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