As I type, oil is at $41.62! And, the market barely moved, and even now, the futures are completely flat. What’s this about? Isn’t salvation at hand? I’ll check later, but does anyone know of any new news concerning oil to account for this near to $42 price? I’m sure I’ll learn in the morning, but I do strongly suspect it’s not real, but, rather, a push by speculative traders, as there would be a far greater response in other markets, like our stocks. I am fascinated as I watch this whole thing. Yes, I’ve missed out on a lot of the recent gains. We elected to sell out of much of our stock, and I hardly have any regret at all, as this ‘rally’ has many a market watcher very nervous… and, for plenty good reasons.
Again, today, there was absolutely NO appreciable volume. In fact, it is truly pitiful. And, it has been all along! When markets truly rally, smaller stocks lead the charge… and, that has absolutely not been happening. You can see large-cap indexes up a bit today, but the mid and small cap indexes declined some. They have badly lagged the large-caps, and aren’t about to pierce their 200-day average for a while yet! Then, there’s the P/E on this forward-looking estimate for the 500… it’s now at 20:1!!! But, get this now, the P/E on the average for the estimate for all the issues in the Russell 2000 is now up to 26.8!
EPS estimates, while improving some as an average for all the stocks in the larger cap indexes, they are still declining among the companies in the smaller stock indexes. This points to domestic economic concerns. I’m content, at this point, to watch from the sidelines, for the most part, while we have relatively small positions in some of our favorite company stocks. More later….
Oil’s slipping back, markets are down, our futures are off, but there’s been a hideous terror attack in Brussels… many dead. Also, found that news I was looking for… A Wall Street article speculated that US oil inventories may have dipped last week. Word is also that prices have gotten ahead of themselves, and are waiting for the news to catch up, meaning, as I had suspected, there is no substantive reason for the oil price rise. And, if the Thursday report does not substantiate the Journal article speculation, it will fall back Thursday morning after 10:30.
Here’s to your successful investing!
Harold F Crowell