My thoughts on the market and the continuing "theatrics" being played out in DC..
If this market sells off on the next few sessions it will be done on "fear" and not fundamentals .. A classic sign to buy if and when that opportunity is presented.
I have found it is difficult if not impossible to produce consistent portfolio profits by trying to react based on the news of the moment -- because its the same news every other investor is aware of.
The better course of action for investors is to always stay focused on the forces of supply and demand, AKA , Price Action. Use that information and structure your portfolio in accordance with the dominant trends of the market. That dominant trend is still in place and is UP. I laid out how the market reacted late last week from a "price action" & technical standpoint, and it confirms the uptrend.
Since then the Russell 2000 small-caps made another new all-time closing high just yesterday, in spite of the nonsense in DC. This is a market telling you it wants to and wil go higher .. It is looking past this debacle in DC.
Some fundamentaal points to consider with the overall global economy:
Stronger Overseas demand ... About 40% of S&P 500 corporate profits are derived from global sources. It is not only the United States that had a PMI that was above 50 and rising in the third quarter - so did Europe, China, and Japan for the first time since early 2009/late 2010. After Europe acted as a drag on overseas sales for the prior six quarters of recession, the economic improvement seen in the third quarter in Europe may result in better international revenue. From industrial production in Germany to machinery orders in Japan and vehicles sales in China, demand is firming around the world. That can only be beneficial to the bottom line.
Copper (the proxy for global growth) demand highest in 18 months ..
So while the majority is focused on Washington, the global fundamentals continue to improve..
A selloff here will be a knee jerk reaction to an issue that we have seen and dealt with before, ,, If presented I plan to use that "fear ' to my advantage...
There is a simple reason for higher stock prices, both now & in the future : Better economic conditions and higher profits.
Best of Luck to all...