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Meidell: Major markets stuck in a time correction?

Though the major market averages briefly closed at all-time highs during January, those rallies ended almost as quickly as they began, leaving the markets with little upward progress. However, all of this waiting and hoping for the stock market to continue higher might be causing some investors to grow impatient. As of Monday’s close, the Standard and Poor’s 500 hadn’t exceeded a daily range of more than 1 percent for 35 consecutive days, making this the longest run of low volatility of this type going back to 1974, according to Thompson Reuters data.

Some believe that stocks can go through both price corrections and time corrections. A price correction is when stocks move for a period of time in the opposite direction of the primary trend. In other words, if the price has been moving higher for a period of time, it typically declines for a short spell, before resuming its trend and moving higher once again. On the other hand, if price has moved too quickly in one direction, it can appear to stall out, as it trades horizontally for a time before once again resuming its primary trend.

With the major market averages so far stubbornly holding on to their gains, the stock market appears to be in a time correction. The major averages were little changed Monday, with the Standard and Poor’s 500 down 0.21 percent and the Nasdaq Composite slipping 0.06 percent.

As we begin the new month, earning season continues. As of Monday, earnings season is a little over halfway completed, with 279 of the companies that make up the S&P 500 having reported their fourth-quarter earnings.

This past week, Philippine President Rodrigo Duterte ordered the closure of 23 mines for environmental reasons. These mines produce mainly nickel and represent roughly 8 percent of the world’s supply. The silvery metal is used primarily in the production of stainless steel, magnets and coins. As speculators rushed back into the nickel market, this week’s top performing commodities were led by the S&P GSCI Nickle index, up 7.96 percent over the past five trading days, followed by the S&P GSCI Palladium index, higher by 4.86 percent.