Saturday, December 24, 2016

Nine Days And Counting: Dow Fails To Surpass 20,000; Luck Matters

Nine trading days have come and gone since the Dow surpassed the 19,900 mark with expectations that Dow 20,000 would soon be a number we'd be looking at in collected rear view mirrors. It was also the day before the FOMC of the Fed issued their well-telegraphed, monumental 25 basis point increase to the federal funds rate (AKA, the Go F Yourself rate for savers), a marketing stroke of genius by the self-appointed rulers of all marketplaces, everywhere, forever.

Well, what happened?

In technical terms, the Fed put the kibosh on stocks. 20,000 didn't happen, just like other sure things this year, such as Hillary Clinton winning the election to become America's 45th president (love that one, just can't give it up).

Other things didn't happen over the past nine trading days (plus one weekend) that were not nearly as important. Donald Trump didn't resign before taking the oath of office (sorry to the serially constipated never-Trumpers like Bill Kristol), nobody killed any special lions or panda bears, and no enormous meteors struck the earth ending the human species (really happy about that last one).

But, a few days ago (Wednesday, Dec. 21), Fearless Rick made possibly the most outrageous prediction of his inglorious career as writer, journalist, blogger and general miscreant. He touted his belief that the Dow would not break the 20,000 mark this year or at least until June, 2017. He mused that the Dow "may" not hit 20,000 until 2023.

Here's his exact quote:
The Dow isn't going to make it to 20,000 this year, and it won't make it by June of next year. In fact, it may not hit 20,000 until 2023. Book it.

So far he's right. But there's still five trading days left in 2016, so plenty of people are rooting against him, including some fat guy in a weird red suit promising some absurd thing known as a Santa Claus Rally. Good luck with that. Far fewer are betting against him, however, as the market in general, and the Dow in particular, seems to have peaked.

There's still plenty of time for him to be wrong. There's the six months until June, and the seven years until 2023. But, since one and seven are Fearless Rick's lucky numbers, he may eventually to be more lucky than good.

We shall see. In case one missed all the non-action of Friday's market churning, it went something like this: Down, slightly, sleepwalking though midday, rabid short-covering into the closing last ten minutes, boosting all the major indices into positive territory. We have all seen this play before. Yawn, and Merry Christmas.

At the Close, Friday, December 23, 2016:
Dow: 19,933.81, +14.93 (0.07%)
NASDAQ: 5,462.69, +15.27 (0.28%)
S&P 500: 2,263.79, +2.83 (0.13%)
NYSE Composite: 11,128.80, +14.66 (0.13%)

For the week:
Dow: +90.40 (+0.46%)
NASDAQ: +25.53 (+0.47%)
S&P 500: +5.72 (+0.25%)
NYSE Composite: +3.58 (+0.03%)

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