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Weekend Reading: A Market In Stasis

Written by Lance Roberts | Sep 8, 2016

market-stasis

The market hangs in a virtual stasis. Over the past couple of months, we have continued to drift from one economic report, or Central Bank meeting, to the next. Each report and meeting have continued to leave market participants confused as to what is going to happen next.

Is the economy improving? Or not?

Will the Fed hike rates? Not?

The bulls and the bears have met at the crossroad. However, neither is ready to commit capital towards their inherent convictions. So, for 43-days, and counting, we remain range bound waiting for what is going to happen next.

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Dana Lyon’s recently noted the historic importance of what is currently happening:

“In today’s Chart Of The Day, we note that, unbelievably, the high to low range in the Dow Jones Industrial Average (DJIA) over the past 40 days is a mere 2.27%. For context, that is the tightest 40-day range in at least the last 100 years. And in fact, the next tightest range – at 2.53%, occurring from December 1922 to February 1923 – is not really even close.”

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“However, the point is made: the stock market is in the midst of a historically tight trading range.”

The issue is that we don’t know for sure which way this “historically tight trading range” will resolve itself or when. What is for certain, is that it eventually will. The problem for investors is the “bet wrong” syndrome that occurs in times like this.  As I wrote at the beginning of August:

“I know. It’s boring. We all want to “DO SOMETHING.”

But that is simply emotion working on you. In investing, sometimes the best thing ‘TO DO’ is to ‘DO NOTHING.’  This is where having the patience to wait for the ‘fat pitch’ becomes much more difficult, but more often than not, provides the best results.”

So, for now, we wait. And while we wait, here are some interesting things to read.


Fed / Economy

 


Markets

 


Just Great Reads

 


“Every once in a while, the market does something so stupid it takes your breath away.” – Jim Cramer

Questions, comments, suggestions – please email me.


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Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube

2016/09/08
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