Stocks Pull Back Again, Market Eyes Support

Plus 5 New Strong Buys for Today [Kevin Matras] Profit from the Pros By Kevin Matras Executive Vice President [Zacks Investment Research] Stocks Pull Back Again, Market Eyes Support Image: Bigstock Stocks were down again yesterday, with the tech-heavy Nasdaq leading the way. Not surprising given the Nasdaq's stellar run over the previous 5½ weeks (up 16.34%), not to mention since they put in their March pandemic lows (up 81.81%). So some profit-taking was bound to happen at some point in time. And that's what we're seeing now. So far, the Nasdag has pulled back by -10.03%, while the S&P and the Dow have backtracked by -6.95% and -5.50% respectively. Pullbacks are never fun. But they are a regular part of trading. In fact, stocks usually pull back about -5% roughly 3-4 times per year. (Pullbacks range from -5% to -9.99%.) And they usually pull back -10% on average of about once a year. (A -10% pullback is called a correction. Corrections range from -10% to -19.99%.) So we've all been thru these things time and time again. Just part of the market. The question now is, when is it going to stop? Of course, nobody knows. But the 50-day moving average should offer some support. Fortunately, the underlying fundamentals of the economy are looking better and better. That was underscored by last week's Employment Situation report which showed another 1.371 million jobs gained in the month of August, while the unemployment rate fell to 8.4%. All in all, over the last 4 months, there has been a record 10.608 million new jobs added. And the unemployment rate has fallen (improved) by 43%. Pretty spectacular given where we were just a few short months ago. And with expectations for unprecedented economic growth for the remainder of the year as our economy continues to reopen, it looks like there's a lot more upside to go for both the economy and the markets. 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