When Welfare Pays Better Than Work
Welcome to the extended version of the BAM Market Note. We are not bloggers by nature but have had clients and friends inquire about our thoughts on the market in between our newsletters. The number and content of posts will likely be determined by the conditions of the markets and the interests of our readers. We would greatly appreciate your feedback and comments.
Saturday, August 31, 2013
Thursday, August 29, 2013
WEAK BOUNCE
To this point, the markets have only managed a weak bounce from oversold prices. This does not bode well for the short term and the markets will have to stage a rally soon or the bears will take full control and we could easily see another quick 2-5% drop in equity prices. The economic news out today was generally positive led by a better than expected GDP report. Tomorrow we will get another round of economic indicators. It is hard to know if one should cheer for positive data (and risk the Fed tightening up on their liquidity) or cheer for bad data so that the Fed will continue to pump money into the system. In any event, the markets are weak here and poised for another potential break-down. Extra caution is warranted until things settle down a bit.
Thursday, August 22, 2013
Wednesday, August 14, 2013
BIDING TIME
The market is in a tight trading range with the S&P bounded by 1700 on the upside and 1685 on the downside. Breaks in either direction will likely lead to the next big move. While there are a number of dark clouds on the horizon, the markets have generally ignored all storms in 2013. At some point, the bulls will not be able to withstand the pressure and a larger decline will occur. With the talk of Fed tapering, a debt ceiling debate, changes in the Fed leadership (and policy?), upcoming elections, unrest in Egypt, and the historically weak month of September fast upon us, it is not the time to get aggressive. We will continually reassess but, for now, a conservative posture is deemed prudent with the information available. The market's resilience has proven a thorn in the side to those of us who have been expecting a larger decline but rest assured it will come (maybe sooner than many think) and we will be glad we have taken a more cautious approach. In the meantime, we remain invested to capture some of the gains and are ready to make portfolio adjustments whichever way this market breaks.
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