Bad news could bring a repeat of April 14, the day of the last consumer price report, when all the major market indices recorded their biggest point drops ever. Higher interest rates are bad enough, but a sense that the rate hikes aren t working could be much, much worse. Until the market sees economic data that puts its mind at ease, the bulls will stay in their pens and the bears will freely prowl. A lot of them seemed to be doing that over the past couple of weeks. In what can best be described as a buyers strike, prices have drifted downward on some of the lightest trading of the year.
People aren t diving in to buy on dips, but they aren t rushing to sell, either.
They re staying put and refusing to panic. Good for them. They re acting as rational long-term investors should. Either through experience or by listening to good advice, they ve figured out that the market rewards patience and punishes haste. In a Los Angeles Times poll released last week, most of the respondents who were already in the market said they have no plans to bail, even though the majority of them think the worst of the current downturn is yet to come.