Investors tried to shake off the Fed disappointment this morning, and they even got help from a very bullish read on productively and factory orders.  However, this wave of selling came after the Bank of England left open the possibility of future rate hikes after increasing UK GDP outlook to 1.5% from 1.2%.

Natural Anxiety

The monster moves in the stock market caught the experts off guard and surprised even the bulls with the distance covered in a short period of time.  This is the best first four months for the Dow Jones Industrial Average since 1999, and it’s the worst performing big index of 2019.
 

Still, the investors must deal with moments when the market is pulling back on essentially no news.  After this latest surge, a lot of profitable folks are looking for reasons to sell, and more often than not, market weakness is the best reason for them.  We have taken a lot of profits and raised cash in the past week.

This brings to mind the axiom that selling begets selling.  It does to a degree.

It’s the kind of selling I love, because it makes great stocks less expensive in the process.  That said, there will be a guessing game of sorts as to what’s going on, played up mostly be the media.  Is it the Fed, is the China trade deal down the tubes, is disco music making come back?

Jobs Report

Because Powell dismissed disinflation as transitory, it’s going to be interesting to see how the street reacts to a potentially strong jobs report tomorrow morning.  I’m still in the camp that good news is good news, and I think there will be a beat on the jobs’ consensus. 

The other part of this market lull are questions over the next catalyst, as we are coming to the end of earnings season. 

For now, the key support point for the Dow is the 50-day moving average 26,064. 

We are going to stay on the sidelines.