WHERE IS ALL THAT WEIRD COMING FROM?
Brand new years always have a certain weird quality attached to them. First, a new year is somewhat of a depressing time. We emerge from the warm, cozy nature of the holiday season, where everything is familiar and inviting, only to find ourselves in an unfamiliar new environment. People who have been residing on their couches with bags of licorice and grape soda are suddenly drawn a gymnasium in an effort to push the unfamiliar onto themselves for the sake of improvement. Others are forming the strategy to escape from whatever it is they think is a detriment to their happy being, whether a job, relationship or one of the dozens of vices there is to choose from. It is as if a new, unfamiliar year causes us to embrace unfamiliarity in everything that we do. No wonder so many resolutions go unfulfilled.
The market environment is much the same. As investors and traders, we are suddenly thrust into a reset environment where new targets, expectations for performance and dilemmas await our attention. While the markets seemingly haven't changed much simply because of the flip of the calendar, they sure do seem different with every new year. The first couple weeks of 2013 have just reinforced this idea...perhaps, more than ever.
If the first nearly two weeks of trading are any indication, then 2013 is going to have a super sized portion of weird thrown into the mix. We started the year with that enormous Fiscal Cliff resolution gap up that automatically caused 95% of fund managers to start the year trailing their benchmark. We have since gone absolutely nowhere. All the meanwhile, leadership is rotating like the barrel of a Gatling gun. Apple is a laggard. Facebook is a leader. Transports continue to show strength. The Semiconductor Index does little to nothing on a daily basis. Mass discombobulation on a nuclear scale.
It is an absolute bombardment of weird. But don't fret, corporate America will come to the rescue over the next couple of weeks with a bonanza of earnings that are sure to give us some ammo from which rational market action can be born.
Lots of weird to start 2013.
Here is to normalcy being born out of a struggle with the unfamiliarity in whatever the markets chooses to do in the year ahead.
