When Will Complacency Finally Catch Up With This Market?

Weekly unemployment claims are stabilizing at reasonable levels and investors are cheering moderation. Too high signals economic weakness and too low suggests this wave of inflation is only just getting started. Holding between these two extremes is the “just right” investors were looking for

The market’s half-full sentiment keeps getting even fuller. That’s been the theme of the year and it doesn’t look like it will change anytime soon. Owners are confidently holding for higher prices and are shrugging off all of the reasons for stocks to go lower. When owners don’t care about the negatives, supply remains tight and prices are stubbornly buoyant.

No doubt something will come along and knock us down, but until that happens, all lights are green. If this market was as fragile and vulnerable as the bears claim, it would have collapsed by now. Things will get more interesting this fall when institutional investors return from summer vacation and start positioning for year-end. But that is still months away and until then, we should expect more of the same.

Cynics claim this market is fixed/rigged/etc, but if they know that’s the case, shouldn’t they be riding along and making money instead of complaining about it? There is only one way to trade this market and that is sticking with what has been working.

The index is trading well but someone forgot to tell Amazon (NASDAQ:AMZN). But a one off day doesn’t mean we should abandon a stock that has been working well for months. On the positive side, Netflix (NASDAQ:NFLX) seems to be finding its footing. While this could have slipped under recent lows, that didn’t happen and it looks like dip buyers are finally warming up to these discounts. This remains a buy above $500.

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