Round and Round The Casino Market We Go
Has investing become just a casino now?
It feels that way since the Fed decided in their half-baked wisdom to take over the markets.
All this week we’ve markets move around with great volatility as various Fed governors have emerged from their focus groups to steer markets in one direction or another. In doing so, they’ve only seen their credibility challenged and compromised.
And, also throughout the week economic data was overwhelmingly weak allowing the prevailing canard, “bad news is good”, to come and go like the desperate plea that it is.
The only relief for bulls came from heavy indexed weight Apple Computer (AAPL) which allowed the tech sector to vastly outperform the rest of the market. The search for outperformance was enhanced by the S&P adding the real estate sector, mostly REITs, to the S&P 500 Index. It should be noted the quest for yield has been pushing the sector much higher and probably making the sector too expensive.
All that scary volatility did in the end allow the S&P 500 Index to close slightly higher on this quadruple options and futures expiration. Gold and crude, to name two, reflects weaker commodity prices.
Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).
Volume on the day was heavy given quadwitching and breadth per the WSJ was negative.
HI/LO INDICATORS DAILY
HI/LO INDICATORS DAILY FEATURED CHART: iPath Bloomberg Copper SubTR ETN (JJC)
HI/LO INDICATORS WEEKLY
HI/LO INDICATORS WEEKLY FEATURED CHART:iShares MSCI Austria Capped (EWO)
HI/LO INDICATORS MONTHLY
HI/LO INDICATORS MONTHLY FEATURED CHART: WisdomTree Brazilian Real Strategy ETF (BZF)
Volatility seems high but you’d never know it from the VIX.
It seems clear to me investors are getting nervous and the Fed’s inconsistencies aren’t helping them gain any confidence from or among themselves.
Overall, investors don’t seem to have a grasp of what authorities are doing. But it’s an election year and one must expect them to support markets.
Let’s see what happens.