CLEVELAND, March 30, 2015 − Holy Week 2015 finds us still up in Cleveland on a part-business, part-holiday trip. For most sports-loving local denizens in our former home town, the big news over the weekend just past focused on the NCAA Midwest Regionals, hosted this year at Cleveland’s Quicken Loans Arena, aka “The Q.”
As expected, Kentucky continued on, its winning streak unbroken. Too bad the same can’t be said for March markets. All averages are down for the month and down for the year as we look to begin trading this morning, and they’re likely to stay that way through Tuesday’s close.
With everything hitting stocks and bonds lately − most obviously apprehension involving the whys and wherefores of the Fed and its “Waiting for Godot” interest rate hikes − volatility has been and remains high, and every trading day is anyone’s guess. Usually a wrong one.
Some reasonably astute financial writers are looking for the market to tread water most of this year. They are probably right. Just too much on the financial plate, and nearly all investments are looking incredibly toppy.
Further, with oil prices gyrating wildly and with the Middle East seeming more than ever as if it’s about to enlist the globe in something like World War III (or IV if you count the Cold War), and with Western capitalism apparently nearing its endgame, traders can be forgiven for possessing more than their usual measure of nervousness.
As for us, when on the road we’re not in a very good position to monitor the action closely. For that reason we’re just keeping minimal position alive, hedged by a few hundred shares of the short S&P 500 ETF, symbol “SH.” We might dump that hedge today, though, if we get a chance, as prior to the open, Monday’s markets look likely to get off to a bullish start for whatever reason. Whether that will last is anyone’s guess.
We also have to remember that this is a short trading week, given Wall Street’s traditional Good Friday holiday closures, and short trading weeks can get a little strange.
We find this particular religiously-based market holiday to be quite interesting in its persistence, as the government seems intent on exterminating every last vestige of Christianity in this society. But traditions tend to die hard, particlarly when they give the big financial kahunas a trading day off. So there you go.
We’ll be back in the D.C. area later in the week, hopefully in time to reassess things and maybe adjust the portfolio. But in all candor, like so many traders and investors, the Maven’s portfolio is down slightly on the year thus far, and the continuing action is just too irrational to game unless you’re a high-frequency trader (HFT) with friends at the SEC who won’t prosecute your market manipulation.
For that reason, when we leave Cleveland and the now-quiet Q in our rear view mirrors in a couple of days, we’ll be thinking a lot about putting in place a capital-preservation strategy that will get us through the rest of this year at least flat by the new year.
No standard, time-honored strategies are working this year, and even the most seasoned and rational professionals are stumped by this market. So perhaps, with apologies to G.W. Bush, the best strategery now is to hunker down and look ahead to the kind of era Warren G. Harding’s 1920 presidential campaign promised Americans wearied of World War I carnage and the presidency of Woodrow Wilson: “A Return to Normalcy.”