Contrary to "public knowledge" the DOW is not representative of the overall market — at least not in the eyes of professional traders, institutional traders, or hedge fund managers. The S&P 500 is; and in case you missed the news last Wednesday, it finally broke its all-time high set just over seven years ago right at the peak of the dot com bubble in the spring of 2000.
The market has been on a tear lately and I’m enjoying being in sync with it, finally (after getting fooled both ways from the Feb 27 decline that ended decisively on March 14, beginning a reaction that would turn a 6% gain in 6 trading days, which is huge for an index). And it held onto those 6% in order to add an additional 6% over the next two months. But all in all, it’s only 9% on the year once you account for the dip. Not bad you think? Dangerous, with such a "weak economy?" Shanghai had a 6% one-day drop, you know, prior to U.S. markets open on the very day we set the all-time record (actually, setting up the perfect bearish sentiment that caused a gap down at open: where new bulls come in and bought the dip ha ha). Uh oh; wasn’t it a scare in China that set off the Feb 27 reaction. Who knows? I just trade the near-term probabilities based on what I see in the chart.
The amazing thing is how little the U.S. markets are up this year
(approximately nine percent) relative to 100 plus other markets around
the world. Markets are up approximately twenty percent in South America
and Canada, twenty percent in Germany, and fifteen to twenty five
percent in the typical Asian market.
Or you could just wait until the next time the "sky falls," at which point you can gleefully proclaim: "see!" Then you can warn of the next (even bigger!) falling sky while the world recovers to new highs. And the cycle continues.