WASHINGTON, April 17, 2014 – Confused stocks have had their ups and downs thus far today, with low volume meandering and lack of clear direction combining to give traders fits. Or at least those traders still looking for a little action.
It’s a weird, truncated week, with bonds ready to cease trading at 2 p.m. EDT this afternoon and stocks, bonds and options set to take the day off for tomorrow’s Good Friday observance. For that reason, what trading remains today is being strongly affected by options expiration nonsense. On Thursday? Yep. Remember, markets are closed tomorrow, so options won’t trade Friday, although the current batch will officially expire on time. (NOTE: However, we’ve learned that government bonds will trade today and tomorrow as usual. God, apparently, no longer has standing with this Administration.)
The tone of trading this week has been more or less strongly positive, in spite of Vladimir Putin’s Stalinesque adventurism and in spite of the weak to moderately poor earnings reported this week by a slew of major companies. In a trading environment that worships so-called “earnings beats,” this earnings season seems to be responding positively to modest “earnings fails.”
“‘The limbo stick is lying on the floor right now. They are just stepping over it,’ [he said, noting] expectations set ahead of first-quarter earnings…. ‘this is a stock market that got ahead of itself; the earnings have to catch up,’ Ablin added.”
That’s a wonderfully original if modestly dated analogy, we think, with Ablin referring to the periodically popular dance originally invented in Trinidad we are told. Chubby Checker made it popular back in the day, but Ablin gives his reference a twist, indicating that the bar for corporate performance has now been set so low you can walk right over it and still claim an earnings fail as a win.
Lately, we’ve been shedding the occasional position here and adding a preferred stock there to increase our yield while the market figures out what to do in a post-QE world. “Sell in May” time is virtually upon us. We waited too long last year and paid a heavy price for it during the Summer of 2013. We don’t plan to hang around for an instant replay this summer.
After losing close to 5 percent by taking a chance on the Ally (ALLY) IPO last week, we also ended up avoiding the IPOs offered this week, as the ones we could get were initially badly mispriced and as the insiders were scooping up potentially way too much of the Maven’s money to give themselves fat exit dividends. That’s typical greedy robber baron-style IPO action that tends to happen at market tops.
Although we are die-hard capitalists here, enough of this is enough. These 1% vulture capitalists already make more than enough money and own more than enough Democrat politicians, so we see no point in giving them even more money to use against us. We think you should agree.
In any event, the moneychangers won’t be in Wall Street’s temples tomorrow, enabling us to have a relatively tranquil Easter weekend. That is, unless a certain godless ex-KGB chief decides to gobble up more of another independent country he thinks belongs to him.
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