I was on CNBC yesterday, talking markets right after the closing
bell. It was a fun segment and I was on with some really good guys.
of the Lindsey Group, Todd Schoenberger of Landcolt Capital, and
Josh Brown of Fusion Analytics were the other guests on the panel.
Peter kicked things off talking about how the recent improvement in
China could help the US markets. Todd laid out why the Fed
continues to run the ship and is holding up equities this year. He
doesn't think the Fed is going to taper anytime soon, as the
economy is still a little too weak.
I was up next and built on what Todd said. To me, besides the Fed
backstop, the one constant has been big spikes in fear during
pullbacks. We've seen record
(INDEXCBOE:VIX) call activity recently and this shows nearly
everyone is hedged against higher volatility. Compare that to 1987,
when selling index puts was all the rage. In other words, no one
was looking for a pullback back then. To me, this year looks more
like 1995, a very slow grind higher amid very low volatility.
Josh then pointed out how earnings season wasn't that bad and he
doesn't think we've earned the right to get to the next level. We
either need to finally get a true cyclical recovery, or the Fed
continues to add money. He isn't looking for a market trading
substantially higher until there is real growth. Todd noted that
this year is different than other years because of the Fed and what
they're doing, reiterating why the Fed won't pullback. Peter
finished things up by noting the big changes we're seeing in the
bond market, as rates continue to move higher just on rumors of
tapering. Just the talk of a Fed slowdown is enough to cap the
market the next few months.
You can watch the whole video below.
This article by
Ryan Detrick, CMT,
was originally published on
Schaeffer's Investment Research
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