If politics in the U.K. or Europe gets more toxic, which is certainly possible, that could do it. So far, however, everyone is behaving in a responsible fashion. If the U.S. economy continues to weaken, that could also do it for us, but recent data is showing continued (though slow) growth.
The thing to watch for over the next couple of weeks will be signs that fundamentals, both political and economic, are eroding. Right now, that doesn’t seem to be happening, indicating that a deeper pullback, while possible, is unlikely to turn into a crash.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by McMillan.