---Volatility within a sideways range.
---Tesla is in a bubble
---Has the Fed changed the goals of their stimulus injections?
Volatility within a sideways range.
The volume in the stock market has been quite low so far this week...with the composite volume 25% below the 10 week average. This is not a surprise at all...given that we’re coming out of a long holiday weekend and investors are waiting for the earnings season to begin. This lack of volume does not indicate a boring market, however, as Monday’s strong gain was followed by yesterdays 1% decline...which shows that volatility is still with us. That said, this volatility has been taking place within a range on the S&P 500, DJIA and Russell 2000 indexes. So even though the Nasdaq has rallied 14 out of the past 17 trading days, the broad stock market has been range-bound for over a month.
Speaking of tight trading ranges, the Treasury market has been in one for more than three months now. That’s right, except for 4 brief days in early June, the yield on the U.S. 10yr note has been stuck in a range near its all-time lows...between 0.5% and 0.75%. When you combine this with the rally in gold above $1,800, you can see that investors are hedging their bets in the high flying tech names they own (just like they did in January and February of this year).
Tesla is in a bubble
Speaking of these high flying tech names, there is no question in our minds that Tesla (TSLA) is in a bubble. That does not mean it cannot go higher...and it also does not mean they will not become the kind of innovative company that changes an entire industry in the way Amazon (AMZN) has over the past 25 years. However, ...