So, are we having fun yet in this year's stock market? If you followed the crowd's "consensus" view on what was supposed to happen this year, the answer is probably a resounding "No!"

For those keeping score at home, this is the second consecutive year in which the self-proclaimed masters of the universe have gotten it wrong - very wrong.

Recall that at the beginning of 2013, everybody and their brother was projecting doom and gloom. The "fiscal cliff" was going to kill the U.S. economy. Europe was going to collapse and kill the global economy in the process. And China's growth rate was going to fall on its face. Therefore, all those experts, with all of their fancy Ivy League degrees, told us that the sky was definitely going to fall in 2013.

And how did the market react? Ms. Market apparently took offense at all the negativity being espoused and put up a gain of 30 percent. As a result, hedge funds had another year of particularly weak returns.

Déjà_vu All Over Again

The situation playing out in 2014 is a bit different. But at this point in the year, the results are largely the same for those using a crystal ball to guide their investment strategy.

For example, remember all the "Sell in May" talk we heard a couple months ago? Remember all the predictions of a severe correction that was going to happen in the second quarter? Remember all the talk about the second year of the Presidential Cycle?

But for the record, the second quarter is almost over and the S&P 500 has made at least a dozen new all-time highs since the end of April.

What has kept the bears and all their negativity from being sent packing in 2014 has been a steady stream of "crises" for investors to fret about. According to the card-carrying members of the glass-is-half-empty camp, each and every one of the dilemmas that have cropped up so far this year "should" have sunk the market.

However, the chart below suggests that the market hasn't seemed to care that much.

S&P 500 - Weekly

However, this is not to say that the bears haven't been trying or haven't had anything to work with in 2014. There have definitely been opportunities for the nattering nabobs of negativism to get something going to the downside.

Below is a quick summary of the "crises" that investors have had to confront in the first half of 2014:

• The "Emerging Markets Currency Crisis"
• The Crimea/Ukraine/Russia "Crisis"
• The Polar Vortex-Induced Economic Speed Bump
• The Momentum Meltdown in Biotech, Social Media and Internet Sectors
• The First Defaults in China
• Tepper Talking Trash at SALT
• And now... the Iraq "Crisis"

To be sure, this is a pretty impressive list of "stuff" that the markets have had to deal with. The chart below illustrates the various "issues" that have defined the year so far.

S&P 500 - Daily

Granted, a 5 percent gain on the S&P 500 isn't much of anything to write home about. And if the bears have it right this time, that puny gain will likely be wiped out quickly once oil starts to run past the $120 per barrel level. (Oh, and oil will continue to move higher, we're told - just you wait!)

And yet, through it all, the market appears to be none the worse for wear.

Aren't There Concerns?

To be clear, this is not to suggest that everything is hunky dory and that stocks should be expected to march straight up from here. No, despite that fact that a new secular bull market has likely begun, the current leg of the bull is definitely getting old. And while bull markets will occasionally last longer than most believe possible, all good things do end eventually in this game.

In addition, there are some important technical divergences in place. Next, most everyone will agree that the central bankers of the world have done a fine job of propping up not only the banking system and the economies of the world, but also the major stock markets. And the bottom line here is that the Fed is most certainly going to pull the punch bowl at some point.

The Point Is...

The point to this morning's missive is that using a crystal ball to guide one's investing strategy - especially when it comes to the U.S. stock market - can be problematic. The simple fact of the matter is that no one has been able to "call" the big moves in the stock market correctly over a long period of time. And THIS is why it is important to have systems, rules, indicators or guidelines to help keep your accounts on the right side of the prevailing trend.

It is true that there is no such thing as a perfect indicators or system. It is also true that a system or a set of rules may cause you to look foolish from time to time (been there, done that!). But, having an unemotional method that can keep you in line with the really big, really important moves in the market may help you avoid losing sleep over your portfolio or the market action.

Announcement: I am excited to announce that my firm (Heritage Capital Management) is joining forces with five others to create a state-of-the-art, multi-manager, multi-strategy investment management/research firm focusing on the algorithmic mixing of investment strategies. To be sure, this an exciting time for me and my colleagues!

But between the meetings, calls, and all the travel, the new venture is turning out to be quite time-consuming to say the least! So, in an effort to squeeze more hours out of the day, I have decided to write my "meandering morning market missives" a little less frequently. In short, I'm going to target two to three reports a week for the remainder of the summer (I'll see how it goes from there).

My apologies to those rare individuals who read my missives every single day (I'm told this group has dubbed themselves the "dedicated dozen!"). However, my overall goals are to (a) continue to provide high quality market analysis/commentary/research on a regular basis (especially during times of turmoil) (b) to keep my desk from becoming a fire hazard and (c) to implement my "daily" workout routine more than once a week!

Looking For Investment Management Help?

If you are looking for help with money management, check out Heritage Capital Management's Active Risk Manager Service - or call Heritage for more information at (630) 250-4700.

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Turning To This Morning...

Janet Yellen's dovish commentary during her press conference yesterday remains the focal point of the global markets at the present time. Overnight, Japan's Nikkei surged 1.62% on the back of Yellen's affirmation that there are currently no plans for the Fed to raise rates sooner than markets anticipate. Chinese markets struggled with IPO issues and Shanghai finished with the worst loss in 7 weeks. Across the pond, Europe is playing catch-up to the U.S. And here at home, futures are pointing to a flat open on Wall Street.

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...

Major Foreign Markets:
- Japan: +1.62%
- Hong Kong: -0.06%
- Shanghai: -1.53%
- London: +0.73%
- Germany: +0.77%
- France: +0.92%
- Italy: +1.07%
- Spain: +0.91%

Crude Oil Futures: +$0.36 to $106.29

Gold: +$9.20 at $1281.90

Dollar: higher against the yen, lower vs. euro and pound.

10-Year Bond Yield: Currently trading at 2.584%

Stock Futures Ahead of Open in U.S. (relative to fair value):
- S&P 500: +0.22
- Dow Jones Industrial Average: -6
- NASDAQ Composite: +2.29

Thought For The Day...

Laughter is great exercise - it's like jogging for the soul...

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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of StateoftheMarkets.com and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. One should always consult an investment professional before making any investment.