WHAT’S WITH THE DRAMA HEADLINES?

Due to another slow summer Friday in the midst of a longer-term market uptrend, finally the Dow 30 ended the week in red territory and most of the articles and many folks say this is horrible and it is a warning sign of the big correction. No, I doubt that.

The Dow 30 closed the week with only 0.09% decline and just five of the 30 stocks in the industrials were in the green. Friday loss was mostly due to Visa, which is the most expensive stock in the Dow and gave a disappointing sales outlook, pulling the stock down 4.2%. The DJIA is still struggling with the 17,000 level.

But put this data in a bigger context. The SP500 started the year around 1,850 and is now 120 points higher or about 6.5% gain for the year. So any correction is only a healthy period of this rally. Basically and finally the S&P 500 didn’t end up with a weekly loss.

• S&P 500 +0.01% for the week 
• Dow -0.8% for the week
• Nasdaq +0.4% for the week

The markets are running in cycles, some days up and some days down that is not a magical, plus there are breakouts and breakdowns quite often. In this bullish sentiment we are more comfortable buying the breakouts than selling the breakdowns. In technical terms recently we see the breakout level at 17,095.

The BFM Assets Team.