- three things that make him nervous; and
- when the market has no idea what to do.
3 Things Make Me Nervous Posted at 2:22 p.m. EDT on Friday, Sept. 20 Three things make me nervous. One, the Volatility Index (VIX) is way too low. Two, we are headed into the budget showdown, and you need cash to buy as the showdown goes along -- it is a gauntlet, remember. Three, we are so overbought it makes sense to take profits, even if things are good -- and they aren't. We are so uncertain at this juncture. The financials act terribly because people sense that rates can't stay down, even as they appear to be. Retail has really stalled. We have earnings around the corner. We are hitting all sorts of new highs. Yet, where's the beef? If you haven't read a single Washington story, you know that you are going to hear endless shutdown talk. Why is that a reason to buy? It is only a reason to buy when we get closer to the end and you need cash now.
Reading This Fed Rotation Posted at 2:13 p.m. EDT on Thursday, Sept. 19 Sometimes the market has no idea what to do. This is one of those times. First, we have decided that the Fed is all powerful and because it got rates down to 2.75% on the 10-year Treasury note, we should sell stocks that do well in a recession, especially if they delivered just in-line earnings. So consumer packaged goods company ConAgra (CAG - Get Report), which reported pretty much exactly what it said it would nine days ago, gets clobbered, going down another dollar on top of the two bucks it lost the day of the preannouncement. Why not? Who needs an underperforming food company when the Fed just greenlighted an economic expansion. Who needs Slim Jims when we can buy stocks of companies that make cabinets and washing machines? Same with General Mills (GIS - Get Report). This fantastic company reported an in-line number and gave in-line guidance, and it has been eviscerated. Who needs Cheerios when we can buy railroad stocks?