September 8 update:
Earnings are strong as are profits and the underlying economy. Yet there are potential problems with which we must consider. First, it is September. Typically, stocks do well up to about the middle of September and then tend to sell off such that the month ends in the red. Some technical analysts suggest that Monday the 18th could be the day selling begins in earnest. Look out below . . . and then buy because October – December are generally strong months and the bull market remains in place. Second, consumer expectations and behaviors are strongly positive at the moment. This could change if the credit (Equifax) breach turns out to have a negative impact on our financial system. Free enterprise systems rely critically on sound financial systems and thus consumers and our entire economy could be adversely effected if the credit hack becomes a larger problem. Financial system collapse due to bank runs before 1933 and the creation of the FDIC were a major contributor to the Great Depression. Let us hope that an increase in the volatility index (VIX) is the only negative consequence. In the mean time, consider buying TVIX or something similar. Good Investing!
