We have gotten to the “churning” phase for the stock market. That is where bullish and bearish sentiment are fairly well balanced. And the market often ends the day close to breakeven
Now that doesn’t mean that it’s all calm and harmonious. Far from it.
Rather, the churning phase sees great intraday volatility as bulls and bears wrestle for the upper hand. Also there is heavy sector rotation with big winners and losers. (Often they trade places the very next day).
What is an investor to do about this?
If you are confident in your bullish or bearish view, then make sure your portfolio reflects that sentiment. If you are unsure of the final outcome, then have a more defensive portfolio with some shorts in the mix to protect against downside. Then wait for a clear catalyst to show you where the next leg of the market will be.
Best,
Steve Reitmeister (aka Reity… pronounced “Righty”)
Executive VP, Zacks Investment Research
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