Fintech executive, writer, math geek, and investment systems developer. Founder and CEO of Altruist and Founder of FormulaFolios.

Is a Bear Market Starting?

Truthfully, it's way to early to tell - but makes for a compelling headline! Now that I have your attention I'd like to share a chart that is a follow up to my most recent market update video.  In the video I showed how the S&P 500 was still trending up, despite some recent volatility.  However, I drew in the upward range and explained how it was important the market continue in the pattern in order for the market to charge higher.

As of this writing, staying in that range is now in jeopardy.

is the stock market at a crossroads?

It doesn't necessarily mean the market will plummet, just that expecting it to climb higher without some type of correction is unlikely.  I'll continue to keep a close eye on this and update blog readers as soon as a definitive move is made.

I suspect that if the market finishes today where it is now (as of 1pm) there's a good chance it will drop to 1,400 (about where the horizontal line is drawn across the entire chart).  That's around 3% more than where it is currently.

It won't happen all at once, and there's actually a high probability the market will attempt to get back in the uptrend early next week, but if it fails  at getting back into the uptrend that's when I feel at least another 3% drop is due.  From there the market will either hold and continue to rise again, or (gulp) fall below and potentially wipe out quite a bit of returns.

The good news is even if the market falters a bit, investors using a conservative, balanced portfolio should not have any issues.  Bonds have held up just fine and actually are moving higher as the market has started to drop.  This update is more or less just informational - so you know what's happening and where we may go from here.

Chat soon,

Jason Wenk

2013 Retirement Plan Contribution Limits

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