Dow Up From Last Week’s Trade Deal Woes
The Dow Jones closed out the week with 3 plus days in a row, culminating in today’s 337 point jump, back above 28,000 – the Dow settling in at 28,015.06. Remember, when I recorded my podcast on Tuesday, we had just finished 3 consecutive down days in a row, and that’s been reversed. The catalyst for the decline, prior to my last podcast was negative news on trade. In particular, the news that Donald Trump, at a press conference, let the cat out of the bag and said, “As far as I’m concerned, it would be better if we waited until after the election to have a trade deal with China. And, of course, the markets were expecting a trade deal any day and all of a sudden Trump is saying, “Hey, I think it’s better to wait until after the election.” – which is a year from now. Of course, it’s not a lock that Trump is going to win a second term. Nonetheless, that was a negative for the market.
Positive Trade News Equals New Dow Highs
Well, what happened, was, on Monday morning, pretty much before they even rang the bell, the White House was already doing damage control and walking that back because all of a sudden I started reading these headlines, “White House Says Trade Talks Going Well”. Of course, that means nothing. But you have a lot of traders now who are keying in on these press releases. As soon as they see any positive news, they just buy. As long as positive trade news makes the market go up, whenever they see the positive trade news, they’re going to buy.
Will We Ever Have a Fact to Sell On?
The reason that all of this news makes people want to buy stocks is because everybody believes that when we do get a deal, the stock market’s going to soar. So everybody wants to be in so they can sell that rally. Of course, I’ve been saying since the beginning that I think it would be a “buy the rumor, sell the fact”, which is why we’re probably never going to have a fact to sell.