Special Risk Capital Management LLC

Getting By With A Little Help From The FED August 28, 2021

Aug 27, 2021 –

With apologies to the (old) Beatles song, this market is getting by with help from the FED. The tone from the Jackson Hole annual FED forum was “dovish”, i.e continued accommodation. No doubt that the markets are addicted to low interest rates; that’s very clear. And so it appears that the positive environment continues for a while.

Now then . . the market breath remains narrow, meaning there are fewer stocks that lead the indexes higher, not a good sign. But other indicators like up/down volume and new highs / lows remain more positive. We’ll take it. Looking at the short term sector strength table below we see the narrow focus is accentually on the Technology based sectors. That’s kind of OK, but it sure would be better to see Financials, Industrials and Consumer Discretionary improve as well. Since the US economy is consumer driven, that strength will be important if we are to move forward for any length of time. Also note below that Defensive sectors are toward the bottom of the list; that’s positive.

That’s about the long & short of it for now. I haven’t left the market, but I do have some Cash to deploy next week if things continue to improve. Take Care and have a good week. ……….. Tom …………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.