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Sept. 13, 2017, 10:13 a.m. EDT

Avoid this one big move if the stock market’s record run is giving you the jitters

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By Barbara Kollmeyer, MarketWatch


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Tech’s defensive formation.

If you were nervous about the S&P 500 at 2,300, then you should probably find that security blanket, because 2,500 is knocking at the door.

In a feat not seen in six weeks, all three U.S. indexes hit a record on the same day yesterday, as this market just refuses to stay down for long. The S&P 500 has already taken out pretty much all of the end-2017 forecasts laid out by big banks last year.

Of course, Apple /zigman2/quotes/202934861/composite AAPL -6.54%  may have something to say about another record session, as some of the iPhone 8, 8s and X euphoria seems to be waning.

For those scaredy bulls needing some extra courage, LPL Financial’s Ryan Detrick notes that the S&P now has five straight monthly wins under its belt, something that has only happened 25 times since the 1950s. “The good news for bulls is a year later it was higher 23 out of the previous 24 times, and higher 13.2% on average,” he says in a note.

Still got the jitters? If that’s the case, then our call of the day from Peter Garnry, Saxo Bank’s head of equity strategy, says there is one move you should definitely avoid right now.

“The worst thing, and unfortunately it’s one of the strategies a lot of retail investors are applying, is just going all cash,” Garnry said on an equities update webinar to clients Wednesday.

Data have shown that missing out on big days can torpedo a portfolio . “It’s very, very important for your long-term gains to be in the market when you get these strong, up-moving days,” he says.

Garnry suggests the uneasy investor “tilt” a portfolio toward defensives like utilities, telecom, health care and consumer staples, and take money off the table from cyclicals — financials, industrials and materials.

There’s one more sector to consider, he says — IT, which has become more defensive over the past five years.

“We think the primary driver of that is that software is 60% of the sector weight,” he says. “Software per definition is a more stable business, more recurring revenue, more predictable” than the two former big IT industries, hardware and semiconductors.

Read: Your best defensive bet is....tech stocks?

Key market gauges

Stocks may struggle to hold onto those highs as the Dow /zigman2/quotes/210598065/realtime DJIA -4.42%   , S&P /zigman2/quotes/210599714/realtime SPX -4.42%  and the Nasdaq /zigman2/quotes/210598365/realtime COMP -4.61%    are all in the red in the early going, as Apple dips. Oil prices are up, lifted after the IEA reported a drop in global supply. Gold  is perking up, while the ICE Dollar Index /zigman2/quotes/210598269/delayed DXY -0.56%  is drifting south. European stocks /zigman2/quotes/210599654/delayed XX:SXXP -3.75%  are falling as Apple suppliers take a hit. Asian markets /zigman2/quotes/211618636/realtime XX:ADOW -0.51%  had a mixed day.

See Market Snapshot for more.

Join MarketWatch in Los Angeles for a panel discussion on international investing in October. Now test your knowledge about overseas stocks.

The chart

The bitcoin bear has growled again.

J.P. Morgan CEO James Dimon took a swing at the lead cryptocurrency yesterday, telling the Delivering Alpha conference that bitcoin is “a fraud” and that it’s all going to end in tears. Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.03%  , which has been under pressure due to lingering concerns over a China bitcoin-exchange ban, has been dipping below $4,000 this morning.

bitcoin_1409
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 273.52
-19.13 -6.54%
Volume: 78.53M
Feb. 27, 2020 4:00p
P/E Ratio
21.60
Dividend Yield
1.13%
Market Cap
$1280.48 billion
Rev. per Employee
$1.98M
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
25,766.64
-1,191 -4.42%
Volume: 664.98M
Feb. 27, 2020 4:20p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,978.76
-137.63 -4.42%
Volume: 3.91B
Feb. 27, 2020 4:20p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,566.48
-414.29 -4.61%
Volume: 3.91M
Feb. 27, 2020 5:01p
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/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
98.44
-0.56 -0.56%
Volume: 0.00
Feb. 27, 2020 4:51p
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/zigman2/quotes/210599654/delayed
XX : STOXX
389.45
-15.17 -3.75%
Volume: 0.00
Feb. 27, 2020 5:50p
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/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,277.49
-16.84 -0.51%
Volume: 0.00
Feb. 27, 2020 1:01p
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/zigman2/quotes/31322028/realtime
US : CoinDesk
8,758.84
+2.84 +0.03%
Volume: 0.00
Feb. 27, 2020 5:01p
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