Older I get, Less I understand... why is market up when Moore lost, rates likely going higher?

Discussion in 'ETFs' started by iceman1, Dec 13, 2017.

  1. Guess all these years and wisdom allegedly gained mean nothing anymore when it comes to irrational behavior. WHY the hell would the DOW be up so much after Moore loses and the Fed is primed to raise rates?!

    Maybe someone a lot smarter than this older guy can provide a genuine reason for this that I may have overlooked. It would very much be appreciated.

    I vividly recall 2000-2001 and where I was when the markets started to crash. I was at El Tovar near the rim of the Grand Canyon watching the bubble burst on a laptop.
    But being older now it is possible that THIS TIME really is different after how many years of going up ever yweek? Maybe the Dow never goes lower again or even corrects 5%-10% ! LOL

    Anyone notice how much the DOW is up in the past few weeks. Is this in touch with theory, economics and intelligence?! On November 14th it was 23,428 and a few weeks later made a high of 24,699 as I write this. Is that sustainable!!! Is there a precedent for that other than... tulips in Holland?!

    At least my 401(k) is performing although I have been exchanging into cash reserves consistently now. Might miss top but not going to particiapte in a large correction or crash like in the early 2000s!

  2. Your timing isn't perfect.. you gave high expectations for your timing....the market is likely to go on and on longer then it makes sense. But calling a top is the most well know difficulty..
  3. speedo


    Traders pay attention to price behavior and not news (noise).
    Chris Mac and Sprout like this.
  4. When Trump got elected, the market started up on the expectation of tax reform that would benefit corporations' earnings and dividends.

    Then when Moore lost (reducing the Repubs majority in the Senate and lowering the probability that a tax reform package would become law).... the market rallied some more.

    Simple as pie. Anybody could see it.
  5. qxr1011


    i think the quest for the reasons should not occupy the minds of traders and even more so of investors... because for traders it is irrelevant what drives the price , and investors occupied themselves with the value

    remember old adage: "The two things an old man should never listen to:

    - when his son says on the ski slop: "Dad follow me"

    and on wall street: "This time is different" :)

    nothing new:

    "The Market Can Remain Irrational Longer Than You Can Remain Solvent" - John Maynard Keynes

    and your rationalization, while seemed logical, is simply revamping the facts to the version that does not contradict your beliefs :)
    iceman1, Xela and speedo like this.
  6. Am I correct to infer that you equate republican wins as a boon to the economy? The theoretical economic argument of that is pretty convincing. Evidence-based models are less so.

    One things markets do like is paralyzed government. I've made the comparison before to the mid-90s Clinton years when congress was preoccupied by sex scandal and the administration was paralyzed from acting on its own for the same reason. Governments doing nothing means economic stability.

    That's how a Trump victory buoys the economy.
    That's how legislative agenda collapse buoys the economy.
    That's how a turning AL purple buoys the economy.
    And that's how tax reform collapse is likely to buoy the economy if it does happen.

    These are not markets moving out of step with the news, this is markets cheering news of ineffectual government.
  7. Sig


    You're making a massive assumption here that markets and/or the economy do better when Republicans control the House, Senate, and Presidency. You may want to check that against empirical evidence.
    piezoe, Sprout, d08 and 1 other person like this.
  8. The U.S. dollar is down.

    Give it one more day. I promise the SP500 will close down tomorrow or I Will tear up the dollar bill I have in my wallet!
  9. shatteredx


    You nailed it here :)
  10. LOL

    shatteredx registered in 2016. No offense but could you be mistaking a bull market for brains.
    #10     Dec 13, 2017