“In the short-run, the stock market is a voting machine. Yet, in the long-run, it is a weighing machine.” - Warren Buffett. It’s always good to periodically revisit this quote, especially when the S&P 500 (SPY) is challenging. And, we are certainly in one of those times with a constant tug of war going on between various bullish and bearish forces. I’m confident that ultimately the bullish forces of earnings growth and low rates will overwhelm the bearish forces of another coronavirus outbreak, overvaluation in pockets of the market, the market being overbought, and excess bullish sentiment. However, it’s becoming clear that this tug-of-war is still ongoing and could last for a few more weeks. In this week’s commentary, I want to share my thinking on this matter and its impact on our market outlook. Read on below to find out more….(Please enjoy this updated version of my weekly commentary published August 04, 2021 from the POWR Growth newsletter).
Market Commentary
As usual, let’s start with the one-month, hourly chart which shows that the market has basically been in consolidation mode over the past week: