The Dow Jones tumbled 6.19%, the S&P 500 fell 5.96% and the NASDAQ pulled back 7.26%. And bucking one of the most reliable seasonal trends of the investing world, the MCSI Emerging Markets Index plummeted 8.33%.
All of your Bull Market Alert positions stopped out at a loss. This includes Alaska Air (ALK), Manhattan Associates (MANH), Signature Bank (SBNY) and the Direxion Daily Small Cap Bull 3X Shares (TNA).
That means that for the first time I can remember, 100% of your Bull Market Alert portfolio is in cash.
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Wow, what a start to the New Year!
By some measures, last week’s market performance was the worst start to the New Year in all of history for the Dow Jones, the S&P 500 and the MSCI Emerging Markets Index.
I like to believe that “there is always a bull market somewhere.”
Well, that wasn’t the case last week.
Not a single one of the 47 global stock markets I track was up last week. The worst performer was Chinese domestic shares, down 13.3%. The best-performing market was Israel, down 3.23%.
Last week’s Bull Market Alert recommended iShares MSCI Ireland Capped (EIRL) for our watch list. EIRL fell “only” 4.11% in the past week. That made it the sixth-best performing market in the world among the 47 that I track.
Looking back over the past month, only two markets were up: Colombia and Egypt.
Finally, over the past three months, only a single market, New Zealand, ended in the plus column.
Overall, the past three months have made for a devastating quarter, especially considering that Q4 and January are traditionally the strongest times of the year.
Needless to say, this makes it a very difficult time to make a new recommendation.
Yes, there are isolated instances of stocks that have broken out to the upside and are in an uptrend.
As an example, one of those stocks is social networking site MeetMe (MEET). But this is a microcap stock, driven purely by speculation and trading at a price-to-earnings (P/E) ratio of 271.
In today’s market environment, I cannot recommend a stock like this in good conscience.
So I am going to hold off on making a new Bull Market Alert recommendation this week.
I hope to be back with a new recommendation next week, as the market settles.
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