The market remains in “stall mode.”

• In part due to valuations.
• In part due to economic uncertainty.
• In part due to geopolitical issues.
• In part due to Fed policy uncertainty.

Valuations don’t tip markets over, but they can help make pullbacks and corrections occur faster, like the infamous All-American Soap Box Derby scandal of 1973.

Magnetic Pull

Source: Daily Camera

The NASDAQ-100 (NDX), trading at the top of its range and well above its 20-year median forward price-to-earnings (FP/E) ratio, has deterred many investors.

Even the Russell iShares 2000 ETF (IWM), which is considered “cheap” by many, is “expensive,” from a historical point of view.

The problem with trying to game these valuations to the downside is that the market has been expensive for a long time, and individual names that changed lives are beyond the scope of acceptable traditional valuations.

But in the next pullback, they will play a role – like an electromagnetic force in front of a soapbox.

Yesterday’s Session

Mostly a dud, but the action in Industrials (XLI) continues the impressive year.

Solar stocks continue to rebound, but there have been so many false alarms. Still, we are watching them for trade instead of adding to a couple of older disasters.

Today’s Session

All quiet ahead of the open. There is some jockeying but mostly this is a wait-and-see situation ahead of Powell’s speech on Friday.

Housing Starts came in better than expected at 1.43 million versus consensus of 1.29 million.

Building Permits missed slightly and continued the downward trajectory.

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