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If Your Eye’s on the SPY, Read This

The SPY is getting some support by the flight to safety.


Video Transcript

Like I said, right now we don’t want to be bearish on the market itself. Instead, if we’re going to be bearish on anything, we’ll pick on some of the weaker components within the major indices like the S&P 500.

Betting against the S&P 500 ETF (NYSEARCA:SPY) is a toughie, especially a large-cap index like that [which includes major holdings of Apple (NASDAQ:AAPL), Exxon Mobil (NYSE:XOM), General Electric (NYSE:GE), Google (NASDAQ:GOOG), Johnson and Johnson (NYSE:JNJ), Chevron (NYSE:CVX) and several others].

A lot of the money that’s coming out of emerging market stocks and some smaller tech companies that’s been absorbed out of those stocks has been moving into large-cap safe havens. They’re not moving into bonds or anything like that yet, but that movement would actually provide a lot of support for the SPY in the short term. Even if it got a little toppy, I don’t think there’s a whole lot of downside potential.

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