Another September stock market correction just came to a close. At least that is what the chart of the SPY is saying.
Never before have stock market bears beaten their drums this loud before. The main stream media paraded out every bear they could find to paint a gloomy picture of future for stock prices. This should not come as any surprise. Financial TV news networks follow the doctrine of if it bleeds it leads. In other words, negative news get more views and clicks regardless of the facts.
If you were to take a look at the September stock market correction the following facts take center stage:
- the decline in prices was orderly
- volatility remained low
- volume declined as the correction played out
- key support level ($320) held firm
SPY Price Chart
Conclusion
The bull market in stocks remains in tact. Contrary to what you hear from the mainstream media, stocks are not about to crash. Yes, the US election is right around the corner and it is logical to assume that volatility will spike. With that being said, remember the 10-year US treasuries yield only 0.69% and prices have peaked. They can’t move higher without devastating savers by offering negative yields. On the other hand, stocks offer more attractive yields and the potential for further price appreciation.
Investor’s who have fallen victim to idea that they can seek safety in government treasuries are headed toward financial ruin.
