Thoughts {06.07.16}

It's probably worth mentioning that 72 years ago a lot of young men where happy to have survived the night having participated in the Normandy Landings on June 6, 1944.  

Much has been made on the passing of Muhammad Ali last Friday.  I think Keith Olbermann gave the best tribute.  Go read it here:  "Muhammad Ali:  Champion of the World".

Now regarding the markets.  Big down day on Friday followed by a nice rebound yesterday.  People want to blame a lousy jobs report last Friday for the trade lower and credit that same report today because there's less concern we'll see an interest rate increase this month.  We're usually more interested in how stocks trade than why they trade in a certain manner.  In regards to the how, this is what I find interesting.  Since the middle of April, stocks have taken many different data points that could have been construed as negative and basically refused to trade lower.  Think about it  when reviewing this list: Investors have worried about another interest rate increase from the Federal Reserve, seen Donald Trump ascend to the pinnacle of the Republican Party {a move that it would seem the investing class would interpret as negative because Trump is an unknown regarding economic policy}, dealt now with the distraction of a possible exit of Great Britain from the EU, and finally recently been handed a slew of economic indicators that have not been great.  This is just a partial list of the negatives I've seen bandied about.  Through it all stocks just won't go down.  Markets have more or less held their own and the S&P 500 is now flirting with it's old highs.  I don't know what this means but none of the concerns we have today are any different than what we saw at the beginning of the year.  Then stocks had a nasty 10% plunge.  Now they shrug many of the same issues away.  

Speaking of last year's high watermark on the S&P of 513.82, we're now about a percent away and short term overbought by our work. I think there's going to be many portfolio managers that are right now underinvested in the markets and will become very nervous real quick if we power through those old highs.  Especially if we do so on heavy volume.  See Josh Brown's thoughts on that here.

Back tomorrow.

*Long ETFs related to the S&P 500 in client and personal accounts.  Please note these positions can change at any time.