Where Do Stocks Go from Here?

It looks like Dow Jones Transports are ready to break down.  The first support area kicks in at 8250.  If it does com down to this level, that is a decline of almost 10 percent. In such a scenario, the S&P 500 can also fall as much.

The S&P 500 lost 0.7% this week.  More importantly, it fell below the support of the 50-day moving average.  The investment climate has been uncertain due to the heightened geopolitical risk and the somewhat less hawkish stance from the Fed.  The forward-looking nature of the monetary policy means there is practically no chance of a May rate hike.  The US 10-year yield fell 14 basis points this week.  It is currently at 2.23%.  It is the fifth consecutive weekly decline and the biggest since early last June.

Maybe it is time to shuffle your investment portfolio a little bit.  Look into your 401K account and examine if the funds need to be re-balanced.  It’s always a good idea to stay vigilant.

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