We're having a little trouble concentrating on the stock market.
Hillary or The Donald. Bill back in the White House, this time with nothing but time on his hands, or slot machines in the West Wing. Our nation up for sale to the highest donor to the Clinton Foundation, or the government transformed into a pay per view reality show.
Is there any way we can have do overs? What if both parties agreed to start the election cycle all over again, and promise to take it seriously this time?
With our lack of concentration, it's a good thing that little has changed in the stock market since last month. It's still a mixed bag. The indexes are near all time highs, so we are leaning slightly long. But the rising tide is not lifting all boats. You must be very selective. Financials, energy, and some tech names are leading, while the miners and utilities are going nowhere fast. Healthcare and bio-techs are coming to life, while real estate and emerging markets are languishing in no man's land. Transports typically a leading indicator are all over the map, with some names looking good and others not so much. This certainly isn't dart board throwing time.
Eyes are on the Fed to see if they will raise another quarter point in June, or July, or whenever. The consensus seems to be that they will raise rates sometime in the next 60 days, and when they do the market could sell off. We're not holding our breath. Our gut says they don't have the guts. We don't pay much mind to consensus anyway. Remember that consensus said Trump wouldn't make it past last summer, then he wouldn't make it past the Iowa State Fair, then he wouldn't survive Super Tuesday, then he wouldn't get the delegate count, then he wouldn't move beyond the second round of a brokered Convention. Now the consensus is he can't beat Hillary. Or make a good President. Hmmm. We say take all consensus with a big fat block of salt. For now, stay light and nimble with your portfolio, and be open to any type of reaction the Fed might produce, if they produce one at all.
At Good Life we are still looking for the market to make a big move one way or the other sometime in the latter half of the year, a move that could very well take the S&P 500 to 2,500 or 1,700, or both. The tight, narrow range of the past two years typically increases the odds of eventually breaking out, though no one knows for certain which direction until it actually happens.
So in the meantime while we trade in this ever tightening range of around 2,020 to 2,135 S&P, we will continue to play our own version of small ball in a very few names, patiently waiting for the next big move to eventually show itself. The strategy is rather simple, but fairly safe and effective. Besides, it's about all we can do when it's so stinking hard to concentrate.