My Best Advice for Navigating This Inconsistent Stock Market
Right now, this is a market of stocks rather than a stock market.
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Small-caps won the day with a gain of around 1.4%, but the story of the market is the inconsistency.
The Russell 2000 IWM has struggled to put together two positive days in a row as market players rush back into the arms of the Magnificent Seven as soon as they can.
The character of the market action on Thursday was different than what we had on Wednesday. It was big-caps, poor breadth, and few pockets of speculative strength on Wednesday. On Thursday, it was small-caps, better breadth, and much speculative action in secondary stocks.
This choppy and inconsistent action reflects uncertainty, and many market pundits view the narrowness and divergent behavior as a sign that a market top is about to start. Maybe, but trying to time a major market turn is very dangerous when we have no idea what will happen daily.
The best advice I can give now is to not focus too much on the indexes, as they are highly deceptive. Focus on individual stocks and manage those positions tightly.
This is a market of stocks rather than a stock market right now. There has never been this level of inconstancy under the surface of the market.
While there is some excellent stock-picking out there, you must actively manage it.
Have a good evening. I’ll see you Friday.
