Dow 16,000 Today?
The Dow crossed over 16,000 for most of the day yesterday, then promptly fell back before the close. The cause for the fallback was supposedly that Carl Icahn stated that stocks were due for a big drop. Of maybe it was that technical selling was slated to kick in at 16,000: I read that one too. So which is it?
Well, this is precisely the problem with short-term moves one way of the other: the reasons given really don't add up to much beyond the day that the reason is given. For example, with the Dow up 0.09% the S&P down 0.34%, and the NASDAQ down a more significant 0.93% at the close, should we now draw some profound conclusions from such divergence - specifically the unusual divergence of almost 1% between the Dow and the NASDAQ? I don't think so. Let's just see what happens today and circle back to this, especially if the Dow turns around: we can then say, "See yesterday was a temporary blip caused by a cranky Icahn. Now that we've broken 16,000, 17,000 is only a few strokes away!" - or not.
But whatever does in fact happen, the fact remains that the Dow has been in an intermediate uptrend, on top of a longer uptrend. Such trends don't usually reverse themselves in a day. That doesn't mean that stocks couldn't fall for a day or more, or that the fall might not significant. But unless we get signs that the longer-term trend is reversing, any such fall would have to be understood as a short-term correction.
So the point here is that reading the financial headlines, never mind much of what's published in the financial press, whether traditional or online (which is, I suppose, now traditional, of course, having been in existence for years now), ought to be mostly ignored. All it ever does is create what we Italian-Americans would call "agida" - defined as heartburn or mental aggravation.
And who needs agida?
Well, this is precisely the problem with short-term moves one way of the other: the reasons given really don't add up to much beyond the day that the reason is given. For example, with the Dow up 0.09% the S&P down 0.34%, and the NASDAQ down a more significant 0.93% at the close, should we now draw some profound conclusions from such divergence - specifically the unusual divergence of almost 1% between the Dow and the NASDAQ? I don't think so. Let's just see what happens today and circle back to this, especially if the Dow turns around: we can then say, "See yesterday was a temporary blip caused by a cranky Icahn. Now that we've broken 16,000, 17,000 is only a few strokes away!" - or not.
But whatever does in fact happen, the fact remains that the Dow has been in an intermediate uptrend, on top of a longer uptrend. Such trends don't usually reverse themselves in a day. That doesn't mean that stocks couldn't fall for a day or more, or that the fall might not significant. But unless we get signs that the longer-term trend is reversing, any such fall would have to be understood as a short-term correction.
So the point here is that reading the financial headlines, never mind much of what's published in the financial press, whether traditional or online (which is, I suppose, now traditional, of course, having been in existence for years now), ought to be mostly ignored. All it ever does is create what we Italian-Americans would call "agida" - defined as heartburn or mental aggravation.
And who needs agida?
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