Posted by kdadmin on September 17th, 2015.
Nine days ago, in my first Market Bull-Oney post, I talked about what mean regression (two steps forward, one step back) meant and how it was useful in volatile markets. As if to give me a gold star, and underscore that point, the stock market has EXACTLY settled at the top of the 50% mean regression range we calculated in that post.
This is good and bad …
It’s good because it means that I can do math. Which is kind of important in my job.
It’s bad because it doesn’t really tell us anything about market sentiment. It’s a “Meh” vote from the broader market. Which forces us to look at ancillary data points in our quest to defend our portfolios while still preying on the sick and the weak … The most curious of which are:
The only reason any of this matters to you is because it frames our entry point. It informs our decision about when to get back in the market, and how. We can’t sit in cash forever, because (low) inflation will get us, and there ARE opportunities to be had.
In other words, in three hours, at 2:00pm Eastern time, we’ll have our answer about the Federal Funds Rate announcement. Shortly after that we’ll see what sort of carnage it, and Janet Yellen’s press conference, have wreaked on the market. Only then will our next move become obvious.
In other other words, Excellent …