Market Update & Trade Alert

Well, here we go again...

Stock market futures prices are down roughly a percentage point this morning, after prices weakened considerably late yesterday with Nasdaq QQQ's down nearly 3.5%.

Extreme caution is warranted in coming days, in my opinion.

These sorts of conditions don't come around very often - and 99% of the time when they set up this way, the worst does not happen.

But it only takes that one time to set back our financial goals far longer than we anticipated.

As you can see from this chart of Nasdaq futures prices above (which trades nearly 24 hours a day), the equity index could well hit a new low price for the year in today's session.

Unless there's a reversal (which seems highly unlikely), we could be looking at another very rough patch for Nasdaq investors. The S&P 500 doesn't look that much better.

And since I have been raising the idea of watching the much-maligned (for good reason) ARK Innovation ETF (ARKK) for clues to the broader market...the fund also fell off the table in yesterday's session.

Depending on who you talk to, the Fed yesterday actually delivered a so-called "pivot" in its post-meeting statement. Then supposedly, it was all undone as chairman Jay Powell made clear in the post-meeting press conference that he would be keeping the pressure on interest rates for a while longer.

It matters of course, in the broad context of the economy and our stocks.

But this kind of stuff - "pivot" or "no pivot" etc - is why you don't see my writing all that much about the Fed saying-this, or the Fed saying-that.

It's the market's reaction that counts.

The announcement was yet another excuse for traders to hit their "sell" buttons.

Jeff

Portfolio Alert:

With all that in mind, I'm moving Outset Medical (OM) out of the goodBUYs portfolio. The stock began to weaken on Tuesday and continues to grudgingly give up ground:

The company reports its quarterly numbers next week, and while I think it will likely surprise to the upside - I doubt investors will give it a long-lasting gold star (i.e. a higher stock price) if the rest of the market is still moving lower.

So we'll move OM out for an estimated 15% loss in price when the stock begins trading at the opening bell. In terms of loss of portfolio value, it amounts to a little less than 1%.

Again, we have to resist the idea of "holding and hoping"...which in a bear market is a sure recipe for small losses turn into portfolio-damaging monsters.

Jeff