Kaminsky's Call: Stocks Nearing an Inflection Point

Maybe the summer heat melted all sense of logic. Maybe the lack of volume lulled investors into a sort of stupor, where they ignore typical market dynamics and focus instead on the World Cup.

Wall Street sign
Wall Street sign

Either way, this past July has to be one of the weirdest on record.

Consider the following:

1. Stocks went up, even as bond yields remained flat or declined. Do bond investors see deflation? Are stocks cheap here? It seems impossible to me that we could be heading towards a deflationary environment AND still have equities rally.

2. Despite concerns of a double-dip, both airlines and crude rose. This is a massive market mystery. For obvious reasons, airlines tend to do poorly when the overall economy suffers. So why are they doing well now? Moreover, if the economy is weak, why has oil rallied? And shouldn't that weigh on the airlines too?

3. The financials stayed flat while the market took off. The conventional wisdom had it that if stocks were to trade higher, it would be the banks and brokers that led them there. But with the exception of Goldman Sachs, (which only rallied off the SEC news) the banks were flat.

4. The Euro rallied, even as the so-called experts predicted the currency'sbreakup. But despite all the proclamations of gloom and doom, we saw some positive economic data out of Europe, some healthy bond offerings, and the Euro has since moved to a one-month high versus the dollar.

5. Despite all the hoopla surrounding Tesla Motors IPO, the market for new issues remained quiet, and even those deals that came public were received coolly. Similarly, M&A saw little action domestically, although globally it did see a pickup.

So what's the "Call-to-Action"? What does this all mean?

It means stocks are nearing an inflection point. The market does not like unpredictability, and we are headed into August with more questions than answers. That weighs on confidence. And that could make the next couple months much more difficult than July.

Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.

Gary Kaminsky does not hold any equity positions.

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