(Recorded on 01/18/22) Topics covered on this video coaching call In this special video, trading coach Jerry Robinson answers several member questions about investing, the Federal Reserve, real estate, and the economy. Included in this video: – A...
MARKET LEADER FAILS…
WARNING SIGN: Massive Selloff Strikes Leading U.S. Stock Market Industry
While market advances are always led by a handful of sectors, today’s extreme concentration of leading sectors and industry groups hasn’t been seen since the dot-com bubble era.
Now, over the last few trading sessions, there has been significant structural damage to the existing long-term uptrend in U.S. stocks.
According to Bloomberg:
Why is this a big deal?
Because until this recent sell-off, stocks in the media industry led the bull market. This small group of 15 stocks has gained more than 500% since their 2009 lows, making them the top performing industry of the entire bull market.
Disappointing results from Disney after the close of trading Tuesday sparked the two-day rout. Selling spread to other television and publishing companies as quarterly reports from CBS to 21st Century Fox Inc. and Viacom Inc. were marked by shrinking U.S. ad sales and profits propped up by stock buybacks.”Bloomberg
The takeaway: The leader of the entire U.S. bull market has just collapsed.
While the long-term uptrend in U.S. stocks remains intact, it is certainly weakening. When leading sectors and industries start to fail, it is similar to failing engines on a high-flying plane. It usually ends badly.
When the leaders in any market begin to fail, it’s wise to tighten up your stops and tread with caution.
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