by Aaron Task in Investing, Commodities
After some early gyrations, stocks settled into a tight range Friday morning, continuing a recent trend of relatively tame action. But the recent trend has been toward higher prices -- in small increments.
It was back Aug. 26 when the Dow last fell below 10,000 for the umpteenth time since first crossing that hallowed mark in October 2008. With the economic data uniformly negative at that time, many traders bet big that the market would suffer another one of its historic September and October woes.
Since then, the economic data has included some upside surprises, including an uptick in retail sales, and major averages have rallied steadily, which is proving to be like water torture for the bears.
The low volatility rally is also frustrating the day traders, momentum investors and high frequency algorithm shops that have come to dominate the market in recent years.
It's way premature to declare the end of the computer-driven market, but it would be classic irony if CNBC's excellent "Man vs. Machine" series marked some kind of bottom for old-fashioned stock picking and (gasp) buy and hold investing. By the same token, I'm reading an advance copy of Never Buy Another Stock Again by former WSJ MarketBeat blogger David Gaffen. Hmm...
You Want Action? We Got Action
In the meantime, while retail investors have largely turned their back on the stock market and professionals are frustrated with the lack of movement, there's tons of action and big swings in other markets, including:
Oil, which hit a one-month high above $77 Monday after the Enbridge pipeline leak but was below $74 in recent trading following the weak U.S. consumer confidence report.
Currencies, which were roiled this week by the BOJ's intervention to weaken the yen and Tim Geithner's "tough talk" about China's currency regime.
Agricultural commodities, the new "hot spot' for hedge funds and a great bet on both emerging market growth (more demand for food) and peak oil-style Armageddon (transportation systems break down so locally grown food will be the only option.)
Sovereign debt: Treasury yields rose sharply last week then fell hard early Friday amid reports, since denied, that Ireland was "perilously close" to calling for a bailout from the IMF and EU.
Gold: The metal hit a series of new highs this week amid reports of central bank buying, general fear of market instability and the persuit of 'beggar thy neighbor' policies by many major economies.
0 comments:
Post a Comment