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.