One Leg is Shaky, but Pay More Attention to Total Support

In a crowd, when someone screams fire at the top of their lungs, the exclamations of the other thousands of people are totally muted. It becomes one theme—FIRE!!  That one scream infects the entire crowd.  Of course, it depends on the crowd.  If that scream is in a small room with only 10 people, and that room is on a side street in a town of one million people, then the result is not so overwhelming.  That is almost how the market is today.

Since we have all (at least the honest people) been burned by a real devastating fire in recent years, those screams tend to set us off running for cover.  But in reality, today’s crowd in the stock market is not a crowd at all, it is a small gathering.  For 10 years—since the 2000 bear market—the only burst of volume you get comes in the sell-offs.  Those screams of FIRE send another contingent of public investors to the sidelines, and the financial collapse of 2008 was the last straw.

But my most important message today is that you have to look at the entire story.

To read today's complete Market Comment, click here.

Don Hays

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