Good Evening,
It’s a typical low volume holiday week. The thing about low volume is it doesn’t take as much money to move things around. In other words, it can be more volatile. However, while breadth was poor today with 2250 gainers to 3500 decliners, things were actually somewhat sedate with very little movement occurring in the major indices. The Dow and the S&P did manage to to set new records, but not by much. Small caps were pretty much down across the board and some sectors that have performed well recently didn’t do as well today. Some of those stocks are considered defensive in nature and their sale could bode well for the coming days. Tomorrows jobs report is looking like it will probably exceed expectations which could set us up for another short term rally, although I am not so sure it will show up until Monday; many traders may be apprehensive about holding stocks over the long weekend. Remember, Friday is the 4th and we only have a half day of trading tomorrow so any action one way or the other is likely to be subdued ahead of the new week. Nevertheless, if the jobs report is good enough we could have a pleasant surprise as market players position themselves ahead of Monday’s open or we could have the opposite and see a sell the news reaction. I find the latter scenario unlikely, but one never knows these days….. I added some more RevShark below. Hopefully, it will help you get a firmer grasp on this market.
RevShark, (James DePorre)
07/02/14 8:07 AM: Morning Thoughts“The smart way to deal with this very strong market is to just embrace the trend and ride it as long as possible. That is what is working but if you traded prior to the meltdown in 2008-9 it is impossible to not take note of the tepid mood. There is little excitement or joy and the market feels nothing like it did in years past.While this action looks a bit like the 1999-2000 run it has none of the same feel to it. The action today isn’t as extreme as what he Nasdaq saw back then but the persistency of the trend is similar. What is very different are the emotions that surround the action.The different in attitude can be summed up quite simply as a difference in the level of confidence. According to Marketwatch.com the Consumer Confidence Index was 144.7 at the peak of the move in 2000. Today that Index stands at only 85.2.It is pretty obvious why market players aren’t as confident today. The economic recovery has been the slowest since the Great Depression, unemployment is still painfully high, central banks are viewed as a source of market manipulation, many people still have no equity in their homes, zero interest rates means there is no place to park idle cash, inflation is impacting food, gas and health care and we are missing the hope that was so prevalent back in 2000.Back in 2000 the talk was often about why things can’t keep on running. It was a whole new world and even the analyst were coming up with new ways to value stocks in order to justify even higher prices. These days the talk is more about when will we pay the price for the endless flood of cheap money created by the Fed and other central bankers? Bulls these days stick with the market because it is acting well not because they are convinced that fundamental conditions are great.The irony is that this lack of confidence and belief in the market has created a giant wall of worry. It is one of the reasons we keep trending higher. The bulls don’t fully commit to the market and are forced to slowly deploy their buying power out of fear of being left behind. They buy because they fear being left out not because they are highly optimistic.The important thing is to be cognizant of the difference in mood and to not be overly bearish because of it. It is very easy to be skeptical and downright negative because there isn’t the sort of euphoria we generally associate with strong bull markets. Many market players despise this market because they don’t understand it. They don’t see the justification for the strength and feel they have to keep fighting it.I keep suggesting that we simply stick with the trend and not engage in chronic top calling. That sounds pretty simple but it is very tough not to have some doubts when you read the paper, talk to friends and contemplate the health of the economy. There are lots of reasons this market shouldn’t be doing so well but they are irrelevant.When the price action shifts then we will need to amend our approach but for now the bulls have the ball and deserve a high level of respect.”
Here’s the quick summary of stocks Wedneday: Close, but no cigar.
| 07/01/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.4549 | 16.3851 | 25.7647 | 36.0806 | 27.0497 |
| $ Change | 0.0009 | -0.0440 | 0.1760 | 0.3192 | 0.1911 |
| % Change day | +0.01% | -0.27% | +0.69% | +0.89% | +0.71% |
| % Change week | +0.02% | -0.12% | +0.66% | +1.31% | +1.01% |
| % Change month | +0.01% | -0.27% | +0.69% | +0.89% | +0.71% |
| % Change year | +1.18% | +4.09% | +7.91% | +7.16% | +5.81% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2536 | 22.7805 | 24.7269 | 26.3277 | 14.985 |
| $ Change | 0.0230 | 0.0834 | 0.1166 | 0.1443 | 0.0937 |
| % Change day | +0.13% | +0.37% | +0.47% | +0.55% | +0.63% |
| % Change week | +0.18% | +0.46% | +0.59% | +0.68% | +0.78% |
| % Change month | +0.13% | +0.37% | +0.47% | +0.55% | +0.63% |
| % Change year | +2.60% | +4.52% | +5.40% | +6.01% | +6.55% |
