Stocks Keep Rising
Stocks continue rising.
Yesterday, the Dow plowed through 12,000, the S&P through 1300. Question: was this because of the "first day of the month" phenomenon? We'll see today - and in the next week or so. If it keeps going up, it's going to surprise a lot of people who've been calling for a correction.
What's up with the "first day of the month"? It seems that if you invest before the opening the first day of every month, then sell at the end of the day and stay in cash the rest of the month, you capture most of the gains in the stock market. Strange but apparently true.
As for the "correction," the bears have been growling for it, even the bulls have said it's time to take a rest. Meanwhile the stock market grinds higher. But here's something interesting.
The stock market may be heading higher because so many people called for a correction. It's one of those "irrational" attributes of markets that you have to get used to. When too many people agree that it should go up, it goes down; when everyone says it should go down...well, you get it.
The problem, however comes when opinion then changes. People start to think they were wrong and start throwing their money into stocks. Maybe that's happening now. If that happens for a while, opinion will change. That's when the stock market will drop - when most people (or at least a lot fewer people) expect it.
It's almost like "the market" gets a kind of kick or perverse thrill out of showing everyone they're wrong.
Yesterday, the Dow plowed through 12,000, the S&P through 1300. Question: was this because of the "first day of the month" phenomenon? We'll see today - and in the next week or so. If it keeps going up, it's going to surprise a lot of people who've been calling for a correction.
What's up with the "first day of the month"? It seems that if you invest before the opening the first day of every month, then sell at the end of the day and stay in cash the rest of the month, you capture most of the gains in the stock market. Strange but apparently true.
As for the "correction," the bears have been growling for it, even the bulls have said it's time to take a rest. Meanwhile the stock market grinds higher. But here's something interesting.
The stock market may be heading higher because so many people called for a correction. It's one of those "irrational" attributes of markets that you have to get used to. When too many people agree that it should go up, it goes down; when everyone says it should go down...well, you get it.
The problem, however comes when opinion then changes. People start to think they were wrong and start throwing their money into stocks. Maybe that's happening now. If that happens for a while, opinion will change. That's when the stock market will drop - when most people (or at least a lot fewer people) expect it.
It's almost like "the market" gets a kind of kick or perverse thrill out of showing everyone they're wrong.
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