“The market plunged this past week in its biggest correction of the year! Run away, flee, panic, the horror….oh…the horror of it all.”
That was the consensus of the headlines from this past week assuming you saw any others than of what was happening in Boston. I am exaggerating somewhat but the reality is that the media’s reaction to the selloff reached a near frantic peak. However, if you have been reading our missives over the past couple of months you were already aware that such an event was coming.
Before I jump into this week’s missive I do want to suggest that you take a few minutes and review some of the blog posts from this past week. I covered the crash in gold and the economy in more detail which is highly worth your time to read. While some of the analysis that we will do today is bullish in the short term – there is clear evidence that the economy is slowing much more rapidly than the media would currently lead you to believe.
Also, earnings season has kicked off and it is very weak at the top line. While bottom line earnings are once again beating much lowered estimates – top line revenue growth is dismal. This is something that the market will eventually come to realize to the disappointment of investors. Caution is advised.