The Dow, S&P 500 and Nasdaq each fell by 1% today. This is the fourth down day in a row for the S&P 500. Declining stocks led by a 3.7 to 1 margin on the NYSE and 2.3 to 1 on the Nasdaq.
The recent weakness in the averages has been attributed to the possibility of the Fed raising interest rates before year-end. It is interesting to note that the last time the Fed raised rates was June 1, 2004 when the Fed funds rate was at 1%. Over the next 25 months, they raised the Federal funds rate to 5.25%. During this timeframe, the S&P 500 gained +17.70%, the Dow +14.43% and Russell 2000 +28.44%.
Our models are bullish; stay the course in a 100% invested position.
Dan Sullivan, The Chartist, www.thechartist.com, 900-942-4278, November 9, 2015