A Couple of Quick Things.

I'm going to be out in the morning but I wanted to post a few comments on the weak market action of the past couple of days.  First the market supposedly went down because Federal Reserve Chairman, Jay Powell set a more hawkish tone for interest rates going forward.  He wasn't that hawkish.  He didn't say anything he hasn't been saying for months.  Investors weren't given any more candy in the form of expected rate cutes and they threw a fit.   Couple that with markets being very overbought and you had a recipe for a couple of down days.

Hard to say if this carries over into something longer lasting or deeper.  If you've been reading this blog for more than a few days then you know that I wouldn't be surprised if we see a return of some volatility and more of a sideways market for at least some period of time.  Markets aren't a one way ticket higher and sometimes stocks need some time to catch their breath.  

One other thing I noticed while reviewing the ETFs in my universe that quite a few spent most of April going nowhere.  That might be a surprise to investors given that some of our broader and more popular averages posted gains for the month.  Hard to say what that means as it could be indicative of a market under distribution or a consolidating pattern.  Markets to me though feel a bit tired.

We have now rolled over into the historically weakest season of the year.  If the past is any guide this would be an area for stocks to pause.  On the other side of that coin is that the May-September period of weakness is sometimes negated when years have such a positive start as what we've seen in 2019.

I'm not trying to predict anything when I point these things out.  For all I know we're going to rocket higher the rest of the year.  Still it is wise to pay attention to these sort of clues.  Markets often remind me of canoeing on a river.  If you've paddled that river long enough you become familiar with its terrain and features.  For instance you might know that around a certain bend there's often a sandbar that builds up depending on depth and currents.  Most times you go down the river you can count on it being there, but on some trips it's gone.  The fickleness of tides may have washed it away.  If rounding the bend on this trip you're lucky enough to not have to deal with that barrier then you can thank the water gods.  But just because it's not there on this occasion doesn't mean it won't be back the next time so you pay attention to the signs regardless.

Back early next week.