Back on June 24th, I wrote that we wouldn’t be surprised if stocks remained mostly range-bound between 1,040 and 1,150 on the S&P 500 through the summer (
http://echoesfromthepit.blogspot.com/2010/06/range-bound.html). Except for a brief dip below 1,040 in late June/early July, that’s how things have played out up to this point. Of course, the overall sideways trend in the market has been accompanied by an unsettling amount of volatility in both directions. Investors still seem to be going back and forth over whether another recession is a foregone conclusion, or if the decline from late April to late June largely discounted those concerns.
For our part, we’re trying our best not to rush to any conclusions, and to remain open-minded and flexible here. We’re concerned enough that we made a few adjustments in the past week to modestly lower volatility in client portfolios by reducing some highly cyclical equity sectors in favor of more defensive sectors, largely due to increasing signs that the economy is slowing. But at the same time, we haven’t decided to fully batten down the hatches yet. With the occasionally treacherous fall period looming, we’re making sure to stay on our toes.
S&P 500 Index: Still Range Bound
