Monday, May 21, 2012

Slow and steady decline can't last

The S&P 500 index (and the stock market as a whole) has been falling at a relatively peaceful and non-newsworthy pace, and as a consequence has not been generating too much fear despite closing at a 4-month low on Friday.

Eventually the market will break out of this trend, probably with either with a bang or a clunk. If the fall accelerates into a crash, then pessimism will spike and the end of this correction will be at hand relatively soon. On the other hand, a newsworthy steep rally can improve the mood of investors and open the door to more losses over a longer period. Either way I'm still hanging on to all of my HDGE shares for now.

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