Market Briefing For Friday, April 29

An incredible 'range-bound' zone not only fostered complacency warned of; but pushed traders to engage in more long-side action than logically comfortable with at these levels (every morning this week); perceiving a need to buy dips as well as 'allow' new highs; although clearly they were dealing with 'conditioning' to accept tactical needs to approach it that way; without really being swayed by knowing the Fed gets nervous about hiking every time the markets dip; and then think they need to every time the market rallies.

It's a ridiculous faith in the Fed, with Volatility essentially hijacked by such things as the low-end volatility environment; as well as any spin they can come up with to justify bullish rationales; such as saying that 'Facebook is the new Apple'. No, that's nonsense; although FB has made tremendous communications inroads; a topic I mentioned ages ago with their plans for Messenger as well as 'voice' and now video (too much so in a way; as it becomes too commercial and data says a bit less personal than the concept intended).

Facebook is a stock where we'd warning against buying in the IPO; because we (rightly) thought it would be lots cheaper after the 'lock-up' restriction; and it was. Thus we liked it around 20. I'm mentioning it, as for those who came into it then; what a great time to take a bit off the table, as even rumors suggest Zuckerberg will soon be doing, despite a forthcoming share split. Sure it may go higher; but time to buy was at 20; of course not with the crowd chasing it a hundred dollars a share higher. And the point was similar with Apple (AAPL); we loved it at split-adjusted 57; and at double that thought it was time to take something off the table.

I have a lot of difficulty accepting chasing stocks when there's nothing truly new aside a doubling in price or more. That's the same point I made when critiquing John Vogel's (Vanguard) comments the other day about 'being content with 2% or low yield environments for a decade ahead'. My view was do not be content; in fact always seek better. I felt that was 'marketing' not the market; and that we will get enough of a correction (or nastier) over time, so that total return will look a lot better than that, simply by putting money back in the market at realistic, or close to that, price levels. The approach of feeding it in at any time, may comfort a fund manager; but it won't necessarily do very well for the individual investor.

Also Treasuries are not exactly a risk-mitigation play, but rather a belief the economy's not going to recover much, at least near-term. Long-term I believe it will; though again demographics and political (policy unknowns) logically restrict CapEx now at least. We'll see how things look later in the year with respect to better growth; so yes that may have something to do with Elections; not just the Fed or Dollar.