We are in this placid moment that feels to many like the calm before the storm. They are looking at the benign moves today and saying, "Just you wait."
The fact is, though, that this is kind of a surprising turn if only because some of us remember this week 29 years ago when we saw the whole market turned upside down. It was the year of the crash of '87 and we had been going up pretty consistently for months, led by pretty much the same stocks that are leading us today, with the exception of a couple pharma stocks with product cycles such as Merck (MRK) with Mevacor, its breakthrough anti-cholesterol drug.
Suddenly we got hit by turbulence, total blindsided as there was nothing going on. No earnings. No announcements from the Fed. Nothing to indicate that anything had gone wrong.
In fact, nothing had gone wrong. Nothing had really gone wrong in the economy before the crash, either. It was just a monster volatility wave, like one of those waves that's tidal, and it swept everything with it.
That's what's so impressive about this tape. With a rotation out of the health cares into the financials and some of the cyclicals, we are blessed with enough money to power things upward. In other words, we could easily be taking it on the chin here even though there has been no news simply because I have seen it before. Given that so many people I talk to are actually looking for some sort of crash, today's action -- and the action of Friday after the multiple rate-hike conversation -- are reassuring that they "can't kill it" even as the circumstances are there to precipitate a killing.
Maybe the ultimate takeaway is this: Don't short a dull market.