Summer Begins This Week: Vacations Should Bring Respite From Wearing Action In Markets

Summer begins this week. With that, expect what can be described as wearing action in markets. Not to worry, vacations that typically accompany summer should bring some respite if you're subject to emotional swings in line with swinging markets.

Notice this analysis incorporates the cheery thoughts and emotions that typically accompany summer for many folks. Then again, the notions of being worn out by swinging markets ain't so hot. But that's offset by vacations that are real vacations, i.e., those that allow you to step away for some period, take a deep breath, and simply get on with some rest and recreation.

Where do you stand on this? Will markets wear you out if they prove to be as dramatic as we think they might? If so, maybe you keep your mind on vacation as the markets start taking chunks out of your purportedly tough hide.

Of, maybe you're more stable in the face of nasty market action - with nasty = volatile. Remember, volatile means both up and down. And for many this can be nasty.

If that's you, consider redefining nasty as markets going down when you're holding lots of stocks. 

That's a good reminder for Bears who don't hold a lot of stocks, but who have watched markets "Melt Up" lately. It's the opposite of holding too many stocks in a big downdraft. You're not making money, maybe losing a bit as the giddy crowd crows about the wonderfulness of stocks for the long run - or something like that.

Anyway, this is all just an attempt to prep and brace for what may be a summer of wild rides. And if that does ensue, don't let it spoil your vacation.

Meanwhile, our Brain Trust folks have been writing their usual varied views of what's going on and what's coming up. So, what the heck, let's look at some of those views before summer arrives.

-   Broader Indices like VALUG, Russell 2000, NYSE Comp have been weaker than S&P and NASDAQ – Shows a big bifurcation between winners and losers

-   43.5% of stocks now trade above 50-day MA

-   Puzzle: What will the rest of the market do until August

-   Summer should be very volatile

-   Next big market decline should commence in September

-   If we’re seeing a continuation of the Bear Market that began in March 2020, most stocks will fall below their 2020 lows – caused be a debt implosion resulting from extreme speculation excesses in markets caused by Fed’s in 2021

-   The only thing that will eventually stop this is another round of Fed. Money creation even bigger than the 42% expansion in 2021-2022.

-   AI now developing into the next stock market frenzy – could be bigger than Dot Com Bubble.

-   Therefore, when this bubble bursts, decline could be greater than Dot Com NASDAQ decline of 79%

-   Fiction that “investors” cause daily market rise or fall – Caused by ‘family and friends’ of Wall Street and Washington.

-   US Residential RE Market not dead. Single home construction peaked in 2006 – so inventory is not huge now.

-   Retail Sales in recession territory when inflation is factored in.

-   A huge change in the credit and financial markets occurred in March – Banking crisis will spread – only hope for regional banks may be that a big bank will buy them.

-   Inflation is not dead. But Fed will not cut rates until there’s a real panic in the markets.

-   Inflation fighting was abandoned by Fed and CBs in March, but façade will be maintained.

-   Tight lending restrictions may offset inflation pressure from rising rates.

Not too sanguine about stocks, I'd say.

But then there's this more constructive view. Not quite buying into the "It's a Bull Market" camp; but at least leaving the door open.

-   All Stock Indices have risen, so bull market rise could be coming – but not sure yet. Dow Theory has not confirmed a Bull Market.

-   Despite rises, Advance-Decline has diverged from Indices.

-   PTI has been neutral for a long time

-   90-Day T-Bill Rate leads Fed Funds rate – and it has been up.

-   Bonds have been bottoming – Once recession sets in, Fed will cut rates – But long-term trend will be rising rates

-   USD bullish, but will resume bear trend if it stays < 101 – Still recommend % in FXE and FXF

-   Gold: Still C Rise, but if 1930 level breached, could see decline to 1840 – Remember Summer tends to be slow for Gold. Keep positions.

-   Gold shares are the bull market of today.

-   Crude: Bear Market underway

Anyway, read, think, then get back to planning vacation. OK?