Why did the DOW gain 889 points today?

[Theben]

Asian markets rallied yesterday, the DOW followed suite.

It won't last.

[KrazyHorse]

If you could summarize in a sentence the cause of market movements then markets wouldn't be needed.

[KrazyHorse]

Originally posted by Theben
Asian markets rallied yesterday, the DOW followed suite.

North American markets followed Asian markets after remaining flat until 2pm ET? Why?

[Kidlicious]

Originally posted by KrazyHorse
If you could summarize in a sentence the cause of market movements then markets wouldn't be needed.

People bought stocks. There. We don't need markets.

[Aeson]

Originally posted by KrazyHorse
My point is that you shouldn't say things like "Getting ahead of the anticipated rate cut among other things. ".

It's was a technically correct statement. /shrug

It's a meaningless statement.

Then you're getting your panties in a bunch about nothing. Good work

It is the type of statement which contributes to the impression that there is real reasoning behind day-to-day movements of markets.

Wait, you just said it was meaningless. How could it convey the meaning you are ascribing to it if it contains no meaning?

There are plenty of real reasons for day-to-day movements in the markets. Countless ones really, each individual investor has their own reasons for their actions, which is part of why predicting them in aggregate is so difficult (at least short term).

But as you admit in the next sentence, sometimes specific factors stand out enough that you can identify them.

Sometimes there is a discernible reason behind movements. Most times there is not.

Today is one of those days where a specific factor on upward pressure on prices did stand out. (I would say more from the short covering side than people going long...) I'm sure there were plenty of other reasons too, but the talk about rate cuts clearly were a factor today.

[KrazyHorse]

Today is one of those days where a specific factor on upward pressure on prices did stand out.

Nonsense. That would mean that people were so short-sighted as to forget that there was a Fed meeting today. Then some time around 2 pm people remembered and bought stocks.

It's this type of thing that makes the markets seem so mysterious to people. When specific, surprise news comes out the markets tend to react predictably. Most market movements are not generated by such obvious motivations. I'm not calling you stupid, because you're not, but it's a lazy answer. The really interesting story today was Volvo. That's where a specific mechanism was active in moving prices, which for a time made Volvo the largest company in the world.

[KrazyHorse]

Originally posted by Kidicious


People bought stocks. There. We don't need markets.

[Aeson]

Originally posted by KrazyHorse
Nonsense. That would mean that people were so short-sighted as to forget that there was a Fed meeting today. Then some time around 2 pm people remembered and bought stocks.

Well, I don't think "short-sighted" is undeserved for a day like today. The second biggest point gain ever... in this economy? With the "good" news being consumer confidence is at a 4 decade low?

But I don't think it's necessarily short-sighted to wait to price in a Fed action. It's not something that lends itself to get priced in long in advance, sometimes not in advance at all. The Fed's actions are (hopefully, right?) going to be based on market conditions at the time of the meeting. You don't price in a Fed action before being able to make some accurate assessments about what those actions will be.

And it's usually only in the last few days leading up to a meeting that it could become clear what the Fed is likely to do. The market seems to be sure this time. /shrug

It's this type of thing that makes the markets seem so mysterious to people. When specific, surprise news comes out the markets tend to react predictably. Most market movements are not generated by such obvious motivations. I'm not calling you stupid, because you're not, but it's a lazy answer.

It's a technically correct answer. Investor's decisions were to some extent influenced by the speculation about what the Fed's action will be. Many investors flat out said that was what they were thinking. (You don't have to agree it's a good motivation, but it's surely a motivation.)

I simply pointed out one factor, while specifically mentioning that it was not the only factor. If you want to pretend it was not a factor, feel free.

[Victor Galis]

Re: Why did the DOW gain 889 points today?

Originally posted by Vesayen
Today, the DOW gained 889 points.

...

So, any theories on why the DOW made huge gains today?

For the exact same reason that dead cats bounce when thrown from great heights.

[notyoueither]

The question is if the deceased feline is bouncing off a step before continuing down or not.

Odds makers are tending towards betting the top of a long staircase.

[Kidlicious]

If they cut the rate to .5, that only reinforces my belief in deflation.

[KrazyHorse]

What belief? (Just a question)

By the way, as I mentioned, the TIPS spread was NEGATIVE last week. That means that people expect deflation over the next few years.

Ruh. Roh.

[Asher]

Re: Re: Why did the DOW gain 889 points today?

Originally posted by KrazyHorse

Please don't give that man a thumbs up, unless it's up some orifice and he's not liking it.

He's absurdly paranoid, even if he is right occasionally, so it must not be encouraged.

[KrazyHorse]

I am not giving him a thumbs up. I am giving his opinion a thumbs up because it is true.

In general, I agree with your assessment of him.

[Kidlicious]

Originally posted by KrazyHorse
What belief? (Just a question)

To clarify, I believe that there will be deflation.