For the first time in some time, I feel the market is behaving normally. I am not sure why I feel this way, but somehow the market action today feels right. I suspect it is the VIX going down, along with the Dow (incrementally), while the Russell 2000 is going up. That just feels right, as if it is the way to go now after all of the recent volatility.

The US dollar going up and remaining on the strong side is slightly disconcerting, but that is tempered by the slight drop in the price of gold, as far as the market is concerned. A higher US dollar is not good for US multi-national companies, as it raises their costs and reduces their profits, in general.

Oil, however, is still the great equalizer in this regard. Everyone benefits from lower fuel prices, including US multi-national companies. Even though yesterday’s death of Saudi Arabia’s King Abdullah bin Abdulaziz’s, otherwise known as the Oil King, sent some uncertainty ripples through the oil market, the word is that the new King Salman will keep policy the same policies, and, because of that, oil is sliding again today.

Just a quick note on King Abdullah … He is responsible for bringing Saudi Arabia’s oil bounty to the forefront of the world’s oil markets. He is also responsible for almost bringing Saudi Arabia into the 21st century. Up against a strong religious wall, he did manage to get some secular reforms through, which earned him the moniker of reformer. Although women still cannot vote, there is hope King Salman will be even more progressive. We will see …

Okay, so how about that GE? Wow! One of the great multinationals, and, perhaps, the largest of them all, reported stellar earnings, despite the hit it took from both lower oil prices and the stronger US dollar.

  • General Electric Co reported a 9 percent rise in quarterly industrial profit on Friday as its businesses that sell power-generating turbines and jet engines helped offset weak sales in its oil and gas unit.

GE’s earnings bode well for the earnings season and the report bodes well for the momentum in the US economy and the market.

  • GE Chief Executive Officer Jeff Immelt said the U.S. conglomerate, which is shifting its focus even more to industrial operations and away from finance, recognized the risks from low oil prices. But he pointed to other areas of strength, including the improving U.S. economy.

Going back to what I wrote at the opening, you know, my feeling that the market seems to be behaving more normally today. Well, as I think about that, I wonder if I am not just feeling good that the market is not up or down hugely. After all, there is still the Fed out there, and with that being the case, the media is wont to talk about it, rather, speculate about it.

  • Federal Reserve policymakers, already struggling to assure investors that they remain on track for a mid-year interest rate rise, will find the task has just become harder with their peers in Europe and elsewhere headed in the opposite direction.

Just one more thing today … If anyone is worried by the incessant chatter about President Obama’s proposed tax changes regarding the 529 College plans, don’t be. Even if the Republican Congress would consider passing it, and they won’t, the plan itself has tax-break offsets that make the tax virtually neutral. As well, if you are in now, your current status would be “grandfathered” in, meaning the old rules would apply. One more thing …

The new tax would go to the recipient of the money, i.e., the student who uses it, and it would be taxed as income, which means the tax would be minimal, if any at all, as we all know how much college kids work.  

Trade in the day; invest in your life …

Trader Ed