The excerpt below is from June.
Only time will tell if we are past the worst of the debt crisis in Europe, or simply enjoying a calm amidst the storm. In either case, the crisis in Greece and the fears of its spread into Spain, Italy, and Portugal have led many financial analysts and commentators to seriously consider what had once been mostly the domain of crackpots–the notion that the euro could collapse and vanish altogether.
The excerpt below is from Friday of this past week.
Traders were less than thrilled with the latest reading on retail sales from the Commerce Department. Even though the 0.4% rise comes on the heels of two straight monthly declines, it was slightly softer than the 0.5% forecast. Meanwhile, the University of Michigan’s monthly reading on consumer sentiment came in at 69.6 in August, an improvement over the July reading that was the weakest since October 2009.
Both the above excerpts exemplify two real bumps in the global economic recovery, and genuine consternation in the market. The fact that both issues are just shy of two months apart suggests that if it is not the European debt issues, the euro, consumer confidence, or U.S. retail sales, it will be something else. Investors are worried and uncertain about everything. So, where is the proverbial “climbing the wall of worry?” What makes one uncertain market different from another? Why is this one trading in a wide range and now trending to the downside? What could make investors bullish in an environment of such uncertainty?
These are not idle questions. In fact, the answers go a long way to determining my strategic approach to the market in the coming months. The problem is I have no answers. I have lost my bearings in the constant turbulence. No matter how much I analyze, or what I seem to figure out about where the market might be headed, the market does not comply. Yes, I am clueless.
Perhaps this speaks to my lack of ability. Then again, perhaps it speaks to the true nature of uncertainty – no one really knows anything, which creates instability. In times such as these, opinions abound, as many for the bullish scenario as for the bearish, and whatever gaps exist between the bulls and the bears, the doomsayers fill quite completely (Dow will drop to 1000, gold will hit $5000).
For me, these days are not tradable. Frankly, I tire quickly of the sudden reversals both up and down. I lose interest when the work I do is subject to the “whims” of an uncertain market. I’d rather spend my time trying to figure out the catalyst that will spark investors into climbing that wall of worry, as uncertainty is the near-term future of the market. Nothing in my crystal ball suggests otherwise, at least for now.
Trade in the day; invest in your life …
