Investors are closely watching the S&P 500, and broad market ETFs such as the SPDR S&P 500 (NYSEArca: SPY) can be good indicators of the direction of market sentiment. The market bounce on Wednesday may be a glimpse of a new phase of market volatility. [S&P Makes Bullish Case for Equity ETFs]
“The first phase of a pullback is when investors who have been waiting for some technical trigger to start taking money off the table finally get one. This entails a shift in stance from “buying on dips” during an uptrend to “selling on declines’ when that uptrend breaks,” Tomi Kilgore of Dow Jones wrote on MarketWatch.
The U.S. economic growth rate is anticipated at around 2% for 2012, which could be on-target for the moment. As the labor market continues to recover at a snail’s pace, any recovery will be soft, and fragile at best.
Looking forward, interest rates are likely to stay low, indicating Treasury yields will also stay modest. Also, be aware of market volatility and have a strategy in place for an uncertain market.
Tisha Guerrero contributed to this article.