After simply witnessing the blow up of a number of giant banks and the decline in fairness projections from prime companies. The concept the worst is over might be a pipe dream. Goldman Sachs shouldn’t be forecasting an increase in S&P for no less than the subsequent yr.
With this concept thoughts then, how has the S&P and market at giant handle to stave off probably the most anticipated crash in all probability in historical past? When each time JPow or Yellen a lot as twitches when speaking charge hikes the market drops after which miraculously rebounds off the 200sma. This isn’t a coincidence.
It’s been noticed for a while that the passive flows from 401k/Pensions injects billions on a bi-monthly foundation largely into the indexes that comprise primarily of simply 7 corporations. Under are the 7 corporations and their weight comprising over half of the whole NDX and 1 / 4 of SPX
Market makers are working additional time to maintain the massive 7 from dropping too far. Nevertheless, members throughout the ’08 GFC additionally tried flocking to tech for security.
So as to add to this, the third leg of bear markets is all the time the worst on a % foundation and it has but to happen
Additional, the SPX with out the highest 7 already exhibits us all the way down to near-COVID ranges.
Can Nvidia save the market and discover the dragon balls? Discover out subsequent time on Dragon Ball Z.
Tl;dr your diversification shouldn’t be diversification. When you purchase indexes, you’re actually simply shopping for the Huge 7