Daily Market Update – August 21, 2014 (9:00 AM)
After all of the talk last week about how it was going to be the best performing in the previous 6 weeks, all it took was a single murmuring of some armed conflict to derail that locomotive. Never mind that the reports were never verified.
In a world where there’s not video tape of absolutely everything that goes on, there’s nothing to have confirmed that market rattling news. Nor were there any denials from the other side, though, so above all, it was confusion that reigned and the market hates confusion.
When you’re on edge anything can set you off.
Still, the week acquitted itself very nicely, despite the sell-off to end the week.
Without any real confirmation of everything just escalating into Armageddon, this week, if it ended after just 3 days of trading would have left last week in the dust, even if Friday was excluded from the results.
So far, the market is up 1.6% for the week and has only the challenge of some mis-spoken words coming from anyone’s lips that may be attending the Kansas City Federal Reserve’s meeting in Jackson Hole. If all goes as hoped and no one pulls the rug out then this stands to be the best week in 4 months and again within a hair’s breadth of more new records.
After Bernanke skpping last year’s meeting the eyes are once again focused there as Janet Yellen will be in attendance and is scheduled to deliver prepared remarks tomorrow. I don’t know how long they have been holding that meeting, but I found myself in Jackson Hole some 32 and 33 years ago, both times in August and don’t remember any Federal Reserve types hanging out in the campground or the Cowboy Bar, but we may have just missed each other. There’s also a chance that I wasn‘t paying too much attention, but it was at least a year later before I had any interest in anything at all.
With attention focusing on the annual event out west the market looks to continue some of the previous three days worth of gains.
What has made this week interesting is that all for but a few minutes after the FOMC statement the market hasn’t really made any attempt to reverse the gains or take any profits.
That’s in fairly sharp contrast to the way the market has very tentatively found its way getting to new high after new high. If you’re a bull you will take comfort in the fact that the climb came bit by bit and had some mild reversals along the way.
“Slow and steady wins the race,” is the basic tenet at play and it should inspire confidence.
Still, despite all of the reasons to remain long in the market, albeit with some cash on the sideline in the event there is an opportunity to capitalize on any mis-steps, it’s clear that there are lots of nerves as there are lots of tender spots around the globe.
For now, none of that matters until it does.
With only a minimal number of new positions opened this week now comes the critical time to begin planning for the coming week which depends on some assignments to help rejuvenate cash and rollovers to put some discretionary cash into the pile.
While watching the market climb higher and assets growing along with the market, the only really tangible evidence of good times is action and the ability to do the rollovers and sell those options.
Hopefully the next two days will have its share of good and tangible news, but if not, there’s always a Cowboy Bar around the corner to drown those sorrows.