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Today, the market saw it’s third consecutive 100 point decline, losing a grand total of 394 points in three days. A lot of the market’s action has been blamed on problems in the Middle East. If I correctly recall my elementary Sunday School class, problems in the middle East date back to the birth of Isaac somewhere around 2000 b.c. This sell-off has very little to do with Israel shooting off a couple of rockets or oil climbing to $77. This sell-off has been caused by a technical breakdown in the stock market, an economic slowdown and a severe drop-off in consumer sentiment. The action in the Middle East may be acting as a catalyst, but that is all. As I have been saying for sometime, the market is due for correction and it appears that the correction is here. Expect more of the same for the next couple of months as the market gets whipsawed back and forth.

For my clients: Despite the S&P losing 2.7% in July, my portfolio is up around 2% for the month. I haven’t recouped all your losses from June, but your account is close to its highs from late May. I was on the wrong side of the action in June, but I have been on the right side in July – but there is no guarantee that I’ll be able to stay there. This market will continue to be ultra-volatile meaning gains and losses will come and go quickly. Overall, I believe your portfolio is positioned to take advantage of the intermediate trends in the market which I covered in my quarterly update.

-Matt

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