see saw As I have described before, this calendar is destined to be unusual in one way or another. The January indicator, looking at the first few days plus the month as a whole, gave us a prediction of being a lousy year for the stock market.

On the other hand, the incredibly strong correlation between the pre-presidential-election year and excellent stock market gains would foretell a good performance by December 31st. Now that we are almost two thirds of the way through the year, how is this tension shaping up?

So far the year’s results remind one of a see-saw–you are moving up and down, but you don’t get anywhere. In the first quarter, the S&P 500 eked out less than half a percent gain plus its dividends. Except for dividends, it lost about a quarter point in the second quarter. Thus far this quarter through mid-day yesterday, the 18th, it has risen 1.6 percent.

Putting those together produces a gain of less than 2 percent plus about 2 percent in dividends. Even though that is a gain, the bad news remains that it is head and shoulders above the current rate for a five year Treasury note, thanks to our all-knowing Federal Reserve Open Market Committee.

You could loan your money to the government for five years for 1.58 percent. After tax, this is probably not even keeping up with the rate of your household inflation. Would you feel very patriotic about helping out 340 million of your national friends?

What is the good news? Forget the government. It is us, the 340 million folks. Chief Economist Brian Wesbury of First Trust Portfolios L.P. notes that housing starts are 10 percent higher than the rate last year at this time. Furthermore, single family starts have risen 19 percent while multi-family starts have decreased by 3.2 percent year over year (, 8/18/15). It’s not all new apartments.

Not only are more housing units being built, but existing homes are selling at a rate almost 10 percent higher than last year. Home purchases with a mortgage are up by 25 percent year over year while all cash purchases have declined from 32 to 22 percent of all closings. Wesbury views this as showing our financial system is continuing to heal.

Our general household health appears to be better than it has in a generation. The financial obligations ratio (share of total income required to pay debts and recurring obligations) was at an all-time high in 2007, but is now the lowest since the early 1980’s. Credit card delinquencies are at an all-time low too. He stresses that there is still room for concern, but I believe that in our personal finances, we have learned an important lesson that will not be soon forgotten. (, 8/17/15).

Other good news is that periods of sideways consolidation such as we have been experiencing are usually followed by a more robust breakout. The devil is in the details as always. When? you might ask. History suggests that this will come in the next six to eight weeks. The caveat is it often is preceded by a fall of several percent in a nasty, unruly fear-inducing sell off. For our ultimate good, the cycle is a blessing, rather like the rains we in the Midwest received yesterday. We need them and they don’t last forever.

(Past performance is no guarantee of future results. Advice is intended to be general in nature. S&P 500 numbers from Worden Bros. TC2000, 2015.)