I know that talk is cheap and for the last few months I have babbled on about inflated stock prices and the relative values to be had in cryptocurrencies, so it is ok if you roll your eyes and sigh. But the relative value case has an inevitability to it that is can’t be ignored. In fact we could be at the tipping point.
This mornings major headline in MarketWatch was: “Dow skids nearly 400 points, S&P on track for longest losing streak in roughly 2 years” Under the headline:
“U.S. stocks slumped Wednesday, with major indexes breaking under key support levels and extending their downward spiral, as rising bond yields continued to weigh on market sentiment.”
Stock investors are increasingly nervous. The CBOE Volatility Index (VIX) was up more than 40% on Wednesday to reach it highest level in six months. About the only time this year the VIX has been higher is back in March when it hit 21. That was about the time the S&P 500 took a 10% dive.
Oh It’s Just Another October
Market historians will be quick to point out how this is the pattern of nervousness that is typical of October. So nothing to worry about. Well maybe so but here are some things to consider. There is more than fear in this market. There are some fundamental reasons to be concerned, like technology.
The tech heavy NASDAQ 100 peaked out around the 7,700 less than two weeks ago. Since then it has lost almost 7%. How important is this: very important. Technology is both the driving force behind the US economy and the stock market as well. Social media, once the darling of Wall Street,