Heavy selling, as of late, is what the headlines are focused on. But let’s take a closer look at two major indexes.
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  • 52% of the stocks in the Nasdaq Composite Index are down by 20% or more in the past year!
  • 44% of the Russell 2000 Index are experiencing the same thing.

For the S&P, it’s only about 11% that have seen a decline of at least 20% in the past year. For years, has noted that stocks continue to rise on multi-decade low volume and a record number of share buybacks.

As companies eliminate their shares, each share that is left in the market becomes more valuable; causing a real increase in value and price. Many of the S&P 500 stocks are actually borrowing to buy back their own shares – a strategy that to date has worked. But let’s face it, this isn’t real growth.

The economy continues to show serious weakness:
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  • Stagnant wages
  • High under-employment
  • Increased consumer debt levels

The market has gone without a 10% correction since 2012! With geopolitical risk reaching a boiling point, I think it is definitely time to make sure all of your trailing stop losses are set correctly, and even take some of your winners off the table. At this point, the near-term upside in the market is likely a lot less than the near-term downside risk.