The Four Questions

Why is this market different from all other markets?

(A Passover-Themed Investment Blog)

Tonight, those of the Jewish faith begin their annual celebration of the freedom from slavery in ancient Egypt. This is the story depicted in the famous movie “The Ten Commandments.” The “Passover” holiday begins with a meal (the Seder), and the prelude to that meal includes the recitation of something called the “Four Questions.” The questions describe how and why Passover is distinguished from other times of the year, and the topic is introduced with the words “why is this night different from all other nights?”

So with a nod to that annual Passover ritual, we present the financial markets’ current “Four Questions.” That is, why is this market different from all other markets?

In this market, stock prices go up even when it seems they should go down

The S&P 500 and Nasdaq Composite indexes rose in the first quarter of 2015, and have risen in value for nine straight quarters. That hasn’t happened for the S&P since 1998. The last time it happened for the Nasdaq was…never. The Nasdaq, focused on Technology and Biotechnology stocks, is outpacing the broader, less glamorous stock indexes handily. We have documented this trend of narrow market leadership in our blog for a while now, and while it continues, that performance gap is not healthy in the long-run. Indeed, our Sungarden® 100 Stock Watch List has few truly excellent short-term opportunities at the moment, based on our technical analysis work. To us, that indicates severe indecision on behalf of the broad market. And throwing good money after bad is not a pastime of ours, so our portfolio cash positions are a bit high right now.

In this market, interest rates stay low.

With all of the speculation about when the U.S. Fed and other central banks will raise interest rates, there seems too little concern for what will actually happen when they do. This seems abnormal to us. The fixed income market has been out of sync for years, so like the Hebrews of Biblical times, we are looking forward to the days where we are free to analyze that part of the market again with a normal lens. Or, sticking with the theme, we have not yet escaped from “bond-age.” To paraphrase Moses, “let my people go…get a decent yield on their savings!”

In this market, traders drown out investors

The two enduring trends noted above are driven in large part by market participants who do not think like you and I do. According to, “high-frequency traders” account for nearly ½ of stock market trading volume. No wonder regulators are pushing for greater supervision of these firms. Until then, we consider this short-term element of daily stock market activity to be the 11th “plague” to supplement the 10 Plagues from the legendary Passover story.

In this market, the U.S. Dollar is dominant.

Whether the U.S. is the so-called nicest house on a bad block or whatever similar analogy you wish to use, the appreciation of the Dollar versus major world currencies has been breathtaking. That said, the Dollar is now bumping up against its highs from back in the 2008 Financial Crisis, and we are seeing early technical evidence that this trend is pooping out (a technical term…not).


We at Sungarden wish our clients and readers a most meaningful Passover, Easter and week ahead!


(c) Sungarden Investment Research


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