The HCM-BuyLine® has been breached and has turned negative. This is the first time since February 2020, at the being of the pandemic, that the HCM-BuyLine® has gone negative. We will be reducing exposure to equities and waiting for the market turn back up. We do expect a trader’s rally as the markets are oversold, but any rally with the HCM-BuyLine® being negative should be sold into. Remember, our mutual funds and ETFs reduce exposure inside the funds.
The first trading day of the year was up, and since then, it has just been a barrage of selling. How fast the markets move in this day and age is sometimes breathtaking. Computerized trading is very evident in these selloffs. Could we be headed to much lower prices? Only time will tell, but the trend is clearly down.
Inflation and rising rates are major causes of this tremendous amount of volatility. Inflation is at 7% and you have to go back to the late 70’s and early 80’s to see these kinds of levels. Gas prices have really moved higher and filling up a tank of gas has gotten very expensive. Food costs have moved a lot higher, along with pretty much everything. The raise in wages is being completely nullified by how high the inflation number is.
Even with the market selling off there is still a lot of road in 2022.