Investors are bombarded by opinions, predictions, and advice from all sorts of "talking heads," "pundits," and "experts." Investors must then go through a filtering process to determine which voices are worthy of attention and which should be routinely dismissed. I have my own favorites that I think trustworthy, and some time I will share my whole list.
One voice that I heed whenever he speaks is Art Cashin of UBS, director of floor operations at the NYSE. Art has been in this business a long time, approaching 40 years, and I see him as an unbiased observer who can be trusted. That doesn't mean Art is always right, but I think he gives sound advice and is an independent voice.
Art said this morning on CNBC that he thinks the next few days will tell us a lot about the market. He thinks we are currently on thin ice, and the earnings that start coming in today, along with the accompanying outlook for the next quarter or so, will tell us if we are to have a mild correction or a more profound pullback to perhaps the 800 level on the S&P.
Art thinks the size of a possible correction will be fairly clear by Friday, July 17th. One thing about Art is he calls his shot, and he doesn't hedge in opaque language.
To me, Art's outlook makes a lot of sense, since this is a very crucial earnings season. My take away from his comments is to just be patient for a few days; let the picture clear a little, and within the next two weeks, I may be putting on some trades or hiding in a cave for a while.
Art also made reference this morning to a 18-year cycle, which is usually divided into a good half and a bad half. He pointed out that we had such a cycle from 1982 to 2000, and we have finished the first half, the good half, of the next cycle. That is not real encouraging about the next nine years, but the market can have good rallies in such an environment.
So, I am going to closely watch the next few days. I agree with Art that the direction of the market should be clearer as earnings season unfolds, and there is a better chance for profitable trades coming than can be seen right now.
Priorities first, then successful investing.