Friday stocks: Oil, gold, tech up; Dow, S&P 500 flat to down

March market action looks more and more like a sideways correction to the Trump Rally. Crude oil, gold get back in the game.


WASHINGTON, March 31, 2017 – We skipped our pair of columns on Thursday simply because there was little to say about this week’s market action that we haven’t said already. Aside from a nasty downdraft followed by an equal and opposite downdraft, from our perspective, stocks have simply been meandering with no sense of direction at all.

The McClellan Oscillator is now sharply above the zero line, suggesting that the worst of the short-term downdraft may be over. For now. However, there’s no indication that it won’t begin again.

McClellan Oscillator, COB March 30, 2017. (Courtesy

The DJIA closed out the week’s trading action Friday off 65.27 points (-0.31 percent), the S&P was off 5.34 points (-0.23 percent), and the tech-heavy NASDAQ was down 2.61 points, a mere -0.04 percent. The latter has been strong all week, so likely needed to take a breather.

Regarding investment news, CNBC and the financial media in general like to blame everything bad on the alleged ineptitude of President Trump. But they’re aiming at the wrong target. If there’s stupidity in Washington right now, it locus is the U.S. Do-Nothing Congress, not the White House, which, if anything, is trying to do too much too quickly.

For that reason, Trump is literally being forced to continue, bizarrely enough, with Obama’s tradition of governing with a pen rather than with a supposedly favorable Republican Congress that absolutely cannot get its act together. This isn’t killing the market right now, but it is putting a question mark on individual and institutional investment plans and is causing many corporate insiders to lighten up on shares of their own companies

Read also: Trading Diary: Is it time to invest in fracking sand?

Yet a great deal of what’s going on with stocks these days has more to do with a pair of unrelated elements, at least at the moment. First of all, now that the latest Fed rate increase has been choked down—it didn’t take much time—and now that the Brexit appears not to have been the end of Life As We Know It, markets are fixated on

  • The price of crude oil; and
  • The odd but somewhat predictable rush of investors back into bonds and bond equivalents

As for oil, we seem to be in an oversupply situation right now, as has been evidenced by the month-long slide in the price of WTI and Brent crude throughout much of March. However, that slide reversed a couple of days ago, and WTI is back up over $50 bbl. once again, while somewhat more expensive Brent crude is now at $50+ bbl. Where’d that come from?

Out of stocks and into bonds? We keep reading that this is true. Problem for us is that we’re relatively insensitive to this, given that we always try to keep a good mix of both in our portfolios, which still hold a few bonds we bought at bargain basement rates in March 2009, the last time the world was for sure going to end.

That said, we have been trying to sneak into a couple of high-yielding CEFs (“closed-end funds” that trade like stocks), and they keep going up. Frustrating, as our general rule is “Don’t EVER chase an investment on its way up.” The reason these high-yield CEFs keep going up, obviously, is that investors at least for now are buying them hand over fist. So maybe the notion that at least a determined number of investors large and small are bailing out of stocks and into bonds has some truth in it.

As Friday trading action grinds to a close, we’re frankly worn out by a week that’s been a whole lot of nothing as far as we’re concerned. We continue to pull in profits like we never have before, which is a delight. But extracting further profits out of newer investments in the April-May timeframe looks like a dicier project. So we remain cautious and hold a fair bit of cash right now. It feels good, and sometimes that’s your best investing barometer of all.

Enjoy the weekend.

Click here for reuse options!
Copyright 2017 Communities Digital News

This article is the copyrighted property of the writer and Communities Digital News, LLC. Written permission must be obtained before reprint in online or print media. REPRINTING CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.

Correspondingly, Communities Digital News, LLC uses its best efforts to operate in accordance with the Fair Use Doctrine under US Copyright Law and always tries to provide proper attribution. If you have reason to believe that any written material or image has been innocently infringed, please bring it to the immediate attention of CDN via the e-mail address or phone number listed on the Contact page so that it can be resolved expeditiously.

Previous articleAgreeing on goals for income tax policy makes the solution easy
Next articleTrading Diary: Is it time to invest in fracking sand?
Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17