At the beginning of the June, I wrote my monthly investing article entitled, “Directions, Please”. The theme was basically the lack of direction – the market trading sideways, unable to decide what to do. Then on June 10, I wrote an update on the blog, entitled, “The Long-Awaited Correction?”. That article spoke of the potential for a weak Treasury auction to spur a long-awaited correction. I proposed that a weak auction of the 30-year note, combined with a rise in interest rates, would signal a downward turn in the markets. Well, despite a challenging auction of the 10-year notes, the 30-year notes actually sold well, and interest rates did not rise substantially following the 30-year auction.
That leaves us back in sideways land, and the market barely budged in either direction last week. Up about 100 points on Dow was the bottom line. Still, the bulls and the bears are essentially stalemated, and money is rotating through various sectors, as most stocks seem to be range-bound.
This week there is likely to be more of the same, because no major news events are expected. Some housing and CPI data will be released, but unless the news is strong either way, the most likely result is more sideways activity. So what to do, I say wait and see – but with a strong bias toward caution.
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