Day-Traders' Delight: Dow Wows With 940-Point Round Trip Thursday Turnaround

With the Dow down more than 340 points Thursday, it appeared that the Money Daily post prior to the market open - Stocks Looking For Reasons To Rally; None To Be Found - was proving to be prophetic.

All of the major indices were bleeding out, led lower by the NASDAQ, which has been the usual suspect over the past two weeks.

It was just after 11:00 am ET that things began to change. From that point, the Dow rallied from 32,071.41 to 32,672.69, taking a little off the top into the close for a nearly 200-point gain. The entire round trip, from the prior close, to the bottom, then to the top, encompassed 940 points, one of the better single-day turnarounds in market history. Certainly, this was one that left many investors scratching their heads because there really wasn't a good reason for stocks to rally other than that they were momentarily oversold.

Just like clockwork, when the S&P 500 broke below its 50-day moving average, the rally commenced. Obviously, some algo-triggering takes place at these important inflection points and Thursday was no exception. The fact that stocks kept rallying over the ensuing five hours into the close suggests that this was more than the ordinary dip-buying and surely nothing that could have been accomplished at the retail level, stimulus checks or otherwise.

It was the usual combination of buying the most-shorted issues, carrying on with favorites and overall bullishness that keeps Wall Street a casino flush with insider winners, all of which leads one to wonder whether this was a one-day wonder or a lasting reversal.

As with everything else in the bizarro-land the 21st century has become, we won't know until after the fact, making trading stocks, holding stocks, shorting stocks or even thinking about stocks an exercise not just in futility, but possibly exposing a masochistic side to the investing life. For years, passive investing has been the go-to methodology for making gains. General indices just go relentlessly higher over time. Pullbacks are brief and shallow. Life is good for people who allow others to manage their money even though it is not supposed to be that way.

For the hard-core trader, life is difficult standing aside the buy-and-holders who aren't responsible for their gains or losses. The trader needs purpose. Ike a shark which dies if it doesn't constantly hunt and eat, the trader must buy and sell in order to survive, which is exactly why they've become nearly extinct. Today's trading is mostly computerized, employing advanced strategies and algorithms to minimize risk. While profits are not always maximized for the passive investor, the losses are few and far between, keeping the universe of hedge funds, retirement accounts, and general wealth funds and their managers all propped up and spending weekends on their yachts.

It's a cozy club at the top because they’re beneficial to the market as a whole. You don't have to do a thing, they say. Just leave it to the masters of the universe and all will be well.

From the looks of things from Thursday, they've got the bull by the horns and appear to be in complete control.

Yawn. Baseball's regular season begins next week. Even with its slow pace, the American pastime might prove a little more exciting than the usual offerings from lower Manhattan.

At the Close, Thursday, March 25, 2021:
Dow: 32,619.48, +199.42 (+0.62%)
NASDAQ: 12,977.68, +15.79 (+0.12%)
S&P 500: 3,909.52, +20.38 (+0.52%)
NYSE: 15,410.37, +133.81 (+0.88%)