Whiplash

Jay Powell and the Fed continue to send mixed signals in their hints of things to come, and traders don't know what to make of it.  They must be getting whiplash by now.

I suspect we'll still be in the dark until the June meeting.  They seem to be being cagey on purpose.  What sort of hammer will fall in a few weeks?  Beats me.

In the meantime, the 4200 level on the S&P 500 was briefly broken to the upside.  We'll see next week if it's just a blip or if there's some actual bullish sentiment out there.

I can't help feeling, though, that there's a huge shoe about to drop somewhere.  Just a feeling.

Waiting, but for what?

The last few weeks have seen an undecided stock market.  There was a brief spike in volatility in late April and early May, but it soon settled down.  The market has basically just gone sideways for the past month and a half.

It feels like everyone's waiting for something.  But for what?

In a previous post, I outlined a few things that had already happened, a few that were in the process of happening, and what I thought might happen in the future.  I suspect many professional traders have thoughts and concerns similar to my own.  I further suspect that they're reluctant to make any big moves until they get some more information.  They're waiting for official government statistics to say XYZ, or they're waiting for the Fed to be more definitive about their intentions, or whatever.

In the meantime, we've continued to see some trouble in the banking sector.  

Also, gold has broken through the $2000/oz barrier and has remained there.  The longer it stays above $2000, the stronger that price becomes as a support line.  The government can lie about inflation all it wants, but it can't lie about gold reaching new highs.  And Jay Powell is presumably watching.

The Fed meets again in about a month.  I suspect they might surprise some people, either with a rate hike or with hawkish language that suggests future rate hikes.  Or both.

We're in mid-May now, so the old axiom "Sell in May and go away" is now in effect, or at least it soon will be.  The summer doldrums will be upon us.  For those interested in bargain shopping for stocks, July will probably be a good time to do it.  This will be especially true if the Fed hikes rates in June and sends stocks tumbling.

Volatility remains low at the moment at 17.12 on the $VIX.  That's not "lower than ever" low, but it's lower than usual, and the $VIX is below both its 50-day and 200-day moving averages.

I still think this fall is when we'll see something exciting happen.

As with the other post I made about this subject, none of this stuff should be considered personalized investment advice.

Take care not to let normalcy bias blind you to historical realities and potential future pitfalls.  Currencies sometimes becomes worthless.  Governments sometimes collapse.  Economies sometimes break down.  All these things have happened before within living memory, and all these things will happen again.  Hope for the best, but prepare for the worst.

In the meantime, we're all waiting for... something.