Chris, its possible the indexes have disguised the correction in stocks you predict. Also note the speed of correction cycles is vastly accelerated by technology, just as its been sped up the cycle of consumer/producer response to a point where its very difficult for any bottlenecks to occur allowing price increases.
So much money has been focued on the major index stocks that their apparent strength and lofty valuations have disguised 50% and greater corrections in the rest of the market. Look at semis, oils, metals, the Russel 2000, the 5000. The correction has been here for some time and we don't necessarily need to see the fattest players like GE, IBM, T, KO etc., correct much more.
An interesting side note is Friday's selling only brought the Russell 2000 down for a moment. It ended positive.
My thinking is we could be seeing the later stages of a continuing BULL Rally, where the action spreads out into smaller growth stocks as the large caps go flat. We've had technical distortions in the typical application of money into the market through index funds. There was nearly as much bad news for the world to respond to when the market was going up as there is now with it going down. Things will turn, man the oars and keep pulling...
Jim |
