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I was recently taken to task on Seeking Alpha for providing a "daily dump" of information (this was likely a play on the title of my morning missive, "Daily State of the Markets") and for failing to provide specific guidance on (a) what the reader should do and (b) what I believe will happen next. This individual is obviously not a fan of my work, and frankly, I can respect that. What I do is definitely not for everyone.

However, the complaint brings up an interesting and to me, anyway, a very important point. You see, I do NOT and will NOT make predictions about the stock market. Sorry, but years of experience has taught me that such endeavors are a fool's errand.

For the record, I manage "OPM" (other people's money) for a living and have done so since 1987. Also to be placed in the full and fair disclosure category is the fact that my firm and my approach can be put in the "active risk manager" category. I started officially managing client money just before the "Crash of '87" and have been trying to keep client accounts in line with the big-picture market environment ever since.

Perhaps the most important thing I have learned over the past 27 years is that Ms. Market doesn't give a hoot about what I think is about to happen next in "her" game. I've learned that my opinions just don't matter. I've learned to check my ego at the door each and every day. I've learned not to equate luck with skill. I've learned that "taking a stand" can be painful and oftentimes costly. And I've learned that "making calls" and predictions are for those seeking attention.

On that note, I will relay a story from a friend/colleague in the money management business about how he is able to get CNBC, Fox Business, Yahoo! Finance, etc. to contact him for interviews on a regular basis. And I quote, "What I do is take the exact opposite stance of whatever is hot at the time. For example, back when Apple was soaring, I called for the stock to crash 60%. The media LOVED that one - I got tons of calls!"

My friend/colleague then laughed and said, "And the funny part is that Apple did actually crater! Suddenly I was a hero and everybody wanted to talk to me!" He added that he has publicly and loudly taken the opposite side of "anything popular" ever since.

But here's the important part. When asked if he used any of his prognostications in his money management business, he replied, "Are you nuts? Of course not!"

My friend went on to emphasize that he uses disciplined models, indicators, and/or systems to dictate 95% of his investing decisions. He says he likes to keep a teeny tiny amount of subjectivity available to him, "just in case things get nutty and my experience might actually be useful."

So, call me a chicken. Challenge my manhood. Throw proverbial stones if you must. But I'm not going to bore you with what I think is about to happen next in the stock market - ever.

Sure, my opinion might be accompanied by more than 27 years of experience. Sure, I can get it right now and again. And yes, there have been times where my intuition was actually better than the models/indicators/systems I use (did I mention the idea about not equating luck with skill?). But, in reality, providing readers with opinions of what "should" happen next isn't likely to do you, or me for that matter, any good.

The bottom line is this: No one (repeat, no one) has been able to consistently "call" the direction of the market for any length of time. So, what would make anyone think they can? Hubris, is the likely answer.

Let's be honest; this is a tough game. Staying on the right side of this bucking bronco we call the stock market is challenging at best. Thus, the goal of my morning missive is to provide anyone willing to spend a few minutes reading my work with an unbiased analysis of what IS happening in the market. I want to try and focus on the actual drivers of the market and not what I think "should" be happening. No, this missive is intended to help readers make informed decisions - or better yet, learn from my years of investing mistakes.

In case it isn't obvious, I'd also like to point out that I don't make predictions or use "my view" when investing people's hard-earned money. In fact, the words 'should', 'could' and 'would' are strictly banned from use in our shop. No, we depend on unemotional, market models, indicators, and systems to guide our positioning. In my humble opinion, investors deserve our best work, not my best guess!

It is my sincere hope this helps clarify why I don't - and won't - "take a stand" in my writing. I am trying to provide objective analysis, not be just another pundit yammering on about what I think the future holds. As the late, great Marty Zweig (a key influence on my career in the early 1980's) used to say, "Those who depend on a crystal ball will end up with an awful lot of crushed glass in their portfolio."

Turning To This Morning

The announcement of the first case of ebola in the U.S. spooked traders after the close yesterday. The patient is now in "strict isolation" in a Dallas hospital and the initial fear appears to have subsided a bit. The big news in the early going is the official PMI numbers out of China and Europe. China's manufacturing PMI came in at 51.1, which was actually a tenth above the consensus and in line with last month's reading. However, the new orders component did continue to weaken. Across the pond, Germany's manufacturing PMI slipped into the contraction mode with a reading of 49.9 and the Eurozone PMI continued to slip. Both reports should prompt more talk of stimulus measures. Here at home, we will get our first look at last month's jobs data courtesy of ADP before the bell. U.S. futures currently point to a slightly lower 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: -0.57%
    Hong Kong: closed
    Shanghai: closed
    London: -0.31%
    Germany: +0.13%
    France: -0.41%
    Italy: -0.16%
    Spain: +0.23%

Crude Oil Futures: +$0.51 to $91.67

Gold: -$1.80 at $1209.80

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

10-Year Bond Yield: Currently trading at 2.487%

Stock Indices in U.S. (relative to fair value):
    S&P 500: -2.11
    Dow Jones Industrial Average: -7
    NASDAQ Composite: -5.09

Thought For The Day:

When you get to the end of your rope, tie a knot & hang on. -Franklin D. Roosevelt

Important Reminder: In order to keep pace with our growth, better serve our advisors and clients, and to provide scale for future growth, Heritage is teaming up with CONCERT Global - an SEC Registered Investment Advisor with more than $2 Billion in assets under management. CONCERT will provide more robust back-office, compliance, technology, and trading infrastructure. Client packets to make the transition will be arriving in the coming weeks.

Positions in securities mentioned: None

Wishing you green screens and all the best for a great day,

David D. Moenning
President, Chief Investment Officer
Heritage Capital Research
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Investment Advisory Services Offered Through CONCERT Wealth Management, Inc. An SEC Registered Investment Advisor

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 is for informational purposes only. No part of the material presented in this report 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.

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