Beginning the shortened trading week on Tuesday morning, the question I hear most traders ask in the “quietest” all-time high in memory is what is it going to take in order to break the nervous tension hanging over the markets right now as we trade at all-time highs in a quiet, dull market. One could questionably argue that the markets are ‘bullet-proof’ right now, turning back any news on ANY front.
Janet Yellen’s talk this past two weeks has actually been a small buying opportunity as the fear of a hike in interest rates as early as late June have temporarily waned. As mentioned last week, the Nikkei is at 10-year highs, the Shanghai (7-year highs) has been literally fun to watch as personally, that is the ‘market’ I look at when I sign on in the morning these days…crude too.
The Greek default ‘situation’ always looms in the background and crude oil up 25%, with little pullback, in the month of April isn’t making matters better. Because the major indices have been basically dull, the “cocktail conversation” as boring as it is, even reverberates back to the performance of the 10-year (bond) to get a gauge of market direction. The USD/EUR was the talk for months but many traders have this pairing what we call the “danger zone”…in the middle of the short-term range.
Many bellwethers have reported what would have normally given another perspective, besides economic numbers, as to how the economy and jobs are doing. Home Depot (HD), Walmart (WMT), Target (TGT) and Lowe’s (LOW) didn’t help with all four stocks either opening up and selling off (HD/TGT) or just acting very poorly and showing little recovery since (WMT/LOW).
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I know that AAPL and NFLX are acting well and helping the Nasdaq, but are jobs and the economy etc. really dependent upon a cult stock and a stock that is a 21st century anomaly? So what’s it going to take?
Besides a few minor real-time data updates in this week’s article, I basically could have taken the last 2 articles I wrote and just plugged in the stocks we have been playing in the conclusion, but I will say again that sometimes the best trade is NO trade. The markets are not fun now but keep in mind we are doing things in the indices that have never been done before and that breeds uncertainty and with uncertainty comes opportunity.
The opportunity NOT to take is to have an opinion based upon an opinion. If you’re bearish, go short some S&P puts…you may be right, but the trend of the market is up on light volume with earnings season coming to an end and with the proverbial “summertime” trading upon us, you may get lucky (bravo to you), but most will get eaten up because every top guy out there says that you can’t time the market, so until there is a catalyst upon which we can react upon, some very boring and mundane clichés come to mind: The trend is your friend and never short a dull market.
What we are trading at Tradeview Markets: CRM FEYE DGX SRPT DE CTRP YOKU ESPR UCO