Thursday January 26, 2017
It is said that when non financial publications make financial news front page or on the magazine cover, the move, in either direction, is near an end..
While most would label the WSJ a financial publication yes it runs columns on markets buried in the Markets and Investing section every day.
But rarely is the stock market front page and center in every day news.
Well not today. I have never seen so many stock market graphs in one edition of the WSJ. And yes it is a doubling of the market since hitting the 10,000 mark in Year 2000.
While the news seeks to link the new high with the promise of Trump the market was heading up already. And no doubt the change in administrations helped the parabolic rise, well,
grow more parabolic.
But market moves up usually end in parabolic fashion, and this is no exception. The last 1,000 points took but 42 days.
Market tops occur as a result of positive social mood.
In the mid 1960s as the Dow approached 1,000 for the first time ever, Americans went to see My Fair Lady and The Sound of Music.
In an echo of that era, La La Land, one of the few musicals recently made, is an Oscar favorite.
Note the happy couple dancing at right, a frequent image of the movie.
Conventional wisdom has it that such movies case movie goers to be optimistic and upbeat, hence the attend La La Land.
But in fact it is social mood turning positive, and turning up markets, that causes La La Land to be popular now, just as Sound of Music was a hit at Dow 10,00.
So it is no accident that La La Land, an appropriate title for Dow 20,000, both are popular at the same time.
Comments