Welcome to the world of uncertainty! Up one percent, down one percent… and round and round we go… where we stop nobody knows! It is all about settling the issues that are disrupting investors confidence. Greece, which was the reason for the rally on Friday, is still a thorn in the side for many who want this resolved and move forward. Then there is the newer challenge of China… down more than 25% depending on the index you look at, is disrupting the confidence factor as well. These are international issues one in the developed markets with Europe, and one in the emerging markets. The downside has been an issue for both indexes and one it will have to be addressed before the markets can move higher.
Then there is the issue of the Federal Reserve… many were looking for the FOMC minutes to offer some clarity on where the Fed stood looking forward with the interest rate increases… of course not. Bernanke caught grief for not giving better guidance and clarity… what does Yellen get? The interest rate hike issue has been poorly communicated and it has been a moving target. I believe it is dependent on the White House. The puppet at the Treasury and the Fed are reluctant to go against the powers that be. Time for the Fed to act and remove this additional cloud from interest rates and the economic picture.
Technology, healthcare and financials have given ground in the leadership and disrupting any leadership opportunities near term. The above issues get the blame and rightfully so. From my view let it unfolds, don’t chase it up and don’t chase it down… this is a head banging market currently. If you look at it too much you will be banging your head against the wall.
As we head into the weekend, take some time to enjoy life and relax, The markets are in exactly the same spot they were last week… nothing in all the ups and downs is impacting direction. The big concern is the break of the 50 DMA and the 200 DMA in time… if all that happens technically the sellers will step up define the direction technically. That could provide short term direction and we will then be able to act based on what we know versus what we think. The issues must get clearer if we are going to make any since of this market in the near term or put our money at risk.
Relax and enjoy… see you Monday!
Don’t forget the Research Notes will be up on Sunday for insight to next weeks outlook!