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As I scan the headlines, I sense buyers and sellers will be none the wiser from reading them. Here are some headlines from CNBC (as at Wednesday night, New York time) along with my assessments:
"USA Wholesale Inventories Rose in May." - Not good, but not diabolical.
"Greece Much Closer to a Fiscal Cliff than America." – This dreaded topic is never far away, even though the world would be happy to take a rest from it all for a while.
"Spain Deepens Austerity Under European Pressure." - Austerity is necessary but too much austerity will kill off a recovery.
"Earning Season Starts...." - Always a cause of concern and uncertainty. Investors are bracing themselves for bad news as forecasts beyond the most recent quarter are likely to be slashed.
"Calm Before Storm? What Low VIX May Mean for Stocks." - The VIX (the ticker symbol for the Chicago Board Options Exchange Market Volatility Index or ‘fear index’) is around 18, which means people are not too perturbed. It could be that investors have become immune to the constant stream of bad news.
"We Still Have that Sinking Feeling." - The GFC kicked in almost five-years ago and we still have no idea what is happening.
And the headlines go on.....
When you look at a daily chart, you can see that markets are range trading. There is a balance between the bulls and the bears and neither feels strongly about the immediate outlook. The bears are not sure there is much downside so they don't sell. The bulls don't see much upside so they are not buying.
If you are trader, then buy and sell to your heart’s content. If you are a long-term buyer, sit on your hands but still keep an eye on your own stocks. Whether you are a trader or a ‘buy and hold’ investor, you must remember that while we generally talk about indices, individual stocks can behave very differently. That's why - even in what may appear to be boring times - we should still treat the markets with respect and keep our portfolios well-trimmed.
Enjoy the ride
Tom Scollon |