Over the past few weeks I have written that stocks seem “tired” or “in need of a pullback or consolidation.” Remember, stock market digestion can occur two different ways; one by price declining 2-5% or price simply moves sideways for an extended period. Right now, it looks like we are getting the latter as the S&P 500 has essentially gone nowhere for more than two weeks.

While all this boredom was occurring, we had a weak employment report, Russia/Ukraine cease fire signed and broken and QE Europe announced by the ECB, certainly lots of news to get stocks moving in some direction if they were ready. Eventually, the market will begin to move again with some significance and I would not be at all surprised if the first move fakes out the masses.

On the sector front much has changed over the past month when I had lots of trouble finding sectors that looked appealing. Now and maybe even more so in another week, most sectors look attractive in one form or another. While banks and energy are lagging and struggling, almost all other sectors look like they want to resolve higher.

I have spoken a lot about my bullish take on long-term treasuries for most of 2014 given the continued sub par economic growth conditions. Recently, however, bonds have had their issues and may need more weakness before the next rally can take hold.

I am keenly watching gold for signs of reversal and I think the shiny metal is getting closer, but as with bonds, it needs some work on the downside before a big rally begins.

Finally, there is this little company in Cupertino CA with the same name as a popular fruit that is unveiling its 6th iPhone any minute. Will the market care?

Paul Schatz

Paul Schatz is President and Chief Investment Officer of Heritage Capital, LLC, in Woodbridge, CT. Paul developed and manages all eight of the firm’s currently offered investment programs.

Editor’s Note: Be sure to check out Paul’s Blog: Invest For Tomorrow

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