Stocks Stage Rebound; Cat-and-Mouse Game Continues Between Bulls and Bears

Is it a bull market? Is it a bear market?

At this juncture, it's a good probability that neither the bull nor bear label is appropriate. At best, one could call the market transitional, or, at worst, confused.

The continuing tug-of-war escalated the past two days as the Dow took a 400-point ride in each direction, ending with a small, 70-point loss to kick off the second quarter.

If none of this makes sense, recall the oft-used quote:

The market can remain irrational longer than you can remain solvent.

Attributed to either legendary John Maynard Keynes or contemporary Gary Shilling, it's worth keeping in mind as markets gyrate. Here is an interesting discussion concerning the quote.

Perhaps John Pierpont Morgan said it best, when asked what the market would do:

It will fluctuate.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/2/18	24,033.36	+389.17	-69.75

At the Close, Tuesday, April 3, 2018:
Dow Jones Industrial Average: 24,033.36, +389.17 (+1.65%)
NASDAQ: 6,941.28, +71.16 (+1.04%)
S&P 500: 2,614.45, +32.57 (+1.26%)
NYSE Composite: 12,367.07, +150.36 (+1.23%)

Stocks Erase Previous Week's Losses with Monday Gains; US Government Debt Surpasses $20 Trillion

Within the first few moments after the opening bell, the major indices - with the notable exception of the NASDAQ - had eviscerated the losses from last week. The NASDAQ almost wiped off last week's 75-point loss, but not quite. The other indices moved radically higher, the S&P setting a new all-time closing high, as did the NYSE.

Hurricane Irma failed to live up to disaster speculation, President Trump seems to have found his best stride, picking off the budget, debt ceiling and disaster relief debates all in one fell swoop, and the tensions over North Korea seem to have subsided, for the present.

Thus, stock investors saw smooth sailing to push already inflated prices even higher with nary a care for valuation. It is this very sort of nonchalance that usually leads to major corrections, but one has failed to materialize. That's not to say that it won't, but, with the Federal Reserve and their cohorts in centra banking picking up any slack, there is no reason to end any rally.

All of this enthusiasm for stocks occurs after this past Friday the US government debt surpassed the magical $20 trillion mark, which gives one pause to ponder the wisdom of markets. Albeit, the mainstream news media failed entirely to report this salient fact.

As the saying - attributable to John Maynard Keynes - goes, "Markets can remain irrational longer than you can remain solvent."

Hedge accordingly.

At the Close, Monday, September 11, 2016:
Dow: 22,057.37, +259.58 (+1.19%)
NASDAQ 6,432.26, +72.07 (+1.13%)
S&P 500: 2,488.11, +26.68 (+1.08%)
NYSE Composite: 12,010.37, +122.39 (+1.03%)