WASHINGTON, May 19, 2015 – We decided to bring our old “Waiting for Godot” pals back to illustrate today’s article. Stock averages pretty much tried to stay aloft today, but the bulls didn’t really play that hard, settling for a mediocre and essentially flat close in all the averages, at least as far as the Maven is concerned.
“Hot” areas currently include banks, but not the largest ones, as the Fed minutes loom Wednesday and Janet Yellen is slated to speak on Friday. Will she or won’t she declare an increase in interest rates, and will it be sooner rather than later? Every time the market starts worrying about this, REITs, utilities, preferred stocks and especially bonds take a roundhouse right, straight to the ol’ schnozzola.
That’s pretty much what we were getting today without a great deal of violence in the averages, however. Tomorrow could be a lot worse. Or not. Frankly, we’re getting very tired of this silliness. But as a result, we’re coming to the conclusion that after all the sturm und drang that’s likely to persist throughout 2015, this market is likely to remain in what’s known as a sideways correction for – to use Fedspeak – a “considerable period of time.”
A sideways correction means the market’s going nowhere. “How can you say that?” is what we hear from the peanut gallery. “The market keeps scoring new all-time highs like it did again today.” Right you are. But these new all-time highs aren’t taking place on very much all-time volume at all, which means today’s lofty precincts are likely hitting nosebleed territory and will need to back off.
But when markets back and fill endlessly, ultimately going nowhere special by year-end, that’s what a sideways correction is all about. And we’re beginning to feel like we’re in one, waiting for that guy Godot but knowing in our hearts that he’ll never show up. As in, “Are we wasting our time doing this?”
So, once again, we’ll finish another boring column without even hinting at any possible buys or sells. In this market, the day you buy is the day the averages go down big time, and the day you sell is the day they make “new all-time highs.” Gee, maybe “buy and hold” is going to come back into fashion. At least you don’t tag so many bad trades that way by getting stuck in rapid action bull or bear traps.
We lost some money today due to our stubborn stay in the oil and natgas patches. Indeed, prices may backtrack here for a while after West Texas Intermediate’s (WTI’s) recent $62-ish per barrel high. Prices were tickling $57 today and looked pretty weak.
But in the end, as long as the Powers That Be keep backing and filling this market and as long as stocks don’t trade on likely future earnings instead of non-productive but cosmetic stock buybacks, we’ll just keep sitting here waiting for our pal Godot.
Let’s all have some dinner, then go watch TV. Mindless pap is becoming more attractive these days.