On Friday I suggested “If we’re going to see selling pressure become resistance, this is where it starts” and though this has been an incredibly resilience market, I’m seeing signs of weakness.
I shared some of the signs this afternoon in “Point & Figure Charting the NASDAQ Trend.”
As the trading day got to the close, the S&P 500 and other stock market indexes drifted down.
The S&P 500 tapped its prior high, then backed off.
The NASDAQ 100, which has been in the strongest uptrend, also reversed down the most at nearly -2% today.
I had pointed out the internal weakness in the NASDAQ stocks earlier today.
It seems to be a continuation.
So, “If we’re going to see selling pressure become resistance, this is where it starts” and we’ll soon see if the US stock market attracts some new selling pressure, or if it’s there is enough enthusiasm to buy to overpower any selling.
Even the longest of long term investors should be aware of the risk this could be a significant top in the US stock market. That is, no matter how passive or “buy and hold” you are, if this turns out to be the early stage of a prolonged bear market, you’ll wish you had put in a place a hedging and/or risk management program to protect your capital.
If you need investment advice on risk management, or are interested in our ASYMMETRY® Hedging program, an overlay we can add to any investment portfolio, get in touch here.
Mike Shell is the Founder and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of ASYMMETRY® Global Tactical. Mike Shell and Shell Capital Management, LLC is a registered investment advisor focused on asymmetric risk-reward and absolute return strategies and provides investment advice and portfolio management only to clients with a signed and executed investment management agreement. The observations shared on this website are for general information only and should not be construed as advice to buy or sell any security. Securities reflected are not intended to represent any client holdings or any recommendations made by the firm. Any opinions expressed may change as subsequent conditions change. Do not make any investment decisions based on such information as it is subject to change. Investing involves risk, including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. All information and data are deemed reliable but is not guaranteed and should be independently verified. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. The views and opinions expressed in ASYMMETRY® Observations are those of the authors and do not necessarily reflect a position of Shell Capital Management, LLC. The use of this website is subject to its terms and conditions.
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