Closed for President’s Day today, but Asia and Europe are not. Asia has already closed, but get this: Japan popped during their Monday by 7.16%! Hong Kong rose by 3.27%. Europe is trading now, and they’re having a happy time, too. The UK is ahead by 2%, and Germany by 2.80%.
Our own index futures, now trading in Europe, are ahead by 1.44 to 1.89%. We should be able to hope for further follow-through when we open tomorrow… and that means, if you are wanting to get more defensive, you’ll likely have opportunity to lighten up. I’ll be selling our IBM and taking that loss. With all that’s hanging over energy, and its influence on UNP, I think I’ll part with some, or all, of that. And, I have way too much TSCO. It’s become, by far, much larger than our other positions, so I want to square that up.
Let me close with this. Estimates among the 500 companies in that S&P index have been being revised downward on a daily basis since the end of 2015. As of now, the cuts have totaled an entire 6.7% of the earnings that were forecast only 6 weeks ago. Let that sink in. Earnings estimates, to date, are being pared by analysts at a rate that is on a track of decline equal to 1% per week! How long can that go on before complete and utter panic sets in, and the market collapses?!?!? Look for this to reverse course, if we are to be saved. I’ll watch it daily, but if this trend persists further, to the end of February, and continues on into March. I don’t even want to think about it!
Here’s to your successful investing!
Harold F Crowell