Submitted by Lance Roberts via RealInvestmentAdvice.com,
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.
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.”
“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
- Commercial R/E – A Problem Cometh by Danielle DiMartino-Booth via Money Strong
- The Fed’s Plan Turned Upside Down by Jonathan Garber via Business Insider
- Trump Wants Rate Hike For Wrong Reasons by Ron Insana via CNBC
- August Jobs Changes Little For Fed by John Crudele via NY Post
- Abnormal Normalization by Ed Yardeni via Yardeni Research
- US Recession Jitters & The Impotent Fed by Ambrose Evans-Pritchard via The Telegraph
- Draghi: Not Our Fault Banks Can’t Make Money by Will Martin via BI
- Fed Is Digging A Hole by Joe Calhoun via Alhambra Partners
- Has The Fed Been Breaking The Law by George Selgin via Alt-M
- Weak August Tax Collections Keep Fed On Hold by Lee Adler via ContraClub
- Fed Williams On Rate Policy by John C Williams via FRBSF.Org
- US Data Raises Doubts About Rate Hike by The Capital Spectator
Markets
- 5 Reasons To Worry About Stocks by John Mauldin via Maulding Economics
- Money Mantras For Financial Success by Learnvest via Forbes
- Market Booms Can Last Longer Than Expected by Tom Stevenson via The Telegraph
- Volatility Sends A Rare Signal by Chris Ciovacco via Ciovacco Capital
- The Problem With Dividend Stocks by John Coumarianos via WSJ
- Time To Worry: Stocks/Bonds Moving Together by James Mackintosh via WSJ
- Stocks Inching Closer To Correction by Michael Gayed via MarketWatch
- Fear Gauge Looking Over Confident by Daisy Maxey via WSJ
- ETF’s May Actually Make Weak Players Weaker by Economicpicdata
Just Great Reads
- Corporate Cash Cushion Is Shrinking by Oliver Renick via Bloomberg
- Fading Dividend Increases by Ironman via Political Calculations
- Most Important Stat In Employment Report by Eric Bush via GaveKal
- 10 Lessons From 10 Years In The Trenches by Jason Trennert via RCM
- 30 Years – 10 Attributes Of Great Investors by Credit Suise
- Justify Your Smart Beta Methodology by Rob Arnott & Chris Brightman via ETF.com
- Have Auto Makers Been Fudging Numbers by Tom Schoenberg via Bloomberg
- Department Of Labor, Please Explain by Tyler Durden via ZeroHedge
- Wall Street’s Latest Fleecing Product by Michael Krieger via Liberty Blitzkrieg
- House Supply & Toxic Trend Change by Mark Hanson via MHanson.com
- Clinton vs Trump: Anything Could Happen by Caroline Baum via MarketWatch
- Evidence Of Futility At The Fed by John Hussman via Hussman Funds
- The Apotheosis Of Bubble Finance -Face-plant by David Stockman via Contra Corner
- Stocks Trading Range Beyond Compare by Dana Lyons via Tumblr
- The Case Against Cash by Ken Rogoff via Project Syndicate
- Cash: The Most Hated Asset Class by Jesse Felder via The Felder Report
“Every once in a while, the market does something so stupid it takes your breath away.” – Jim Cramer
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