"Bailout powers stocks"
The title of this post comes from the above-the-fold headline of today's local paper, but is nothing other than a lazy journalist's attempt to state succinctly what requires more thought. A more appropriate title would be, "Fifteenth iteration of bailout plan powers stocks (higher).
Even that correction, though, would be incorrect. Market movements are difficult to explain in three words, irrespective of the attempt to summarize for a headline that introduces an article that might offer a fuller, richer explanation. Alas, the article's remainder (the one that provides this post's topic header) stints on providing clarity, leave alone understanding.
Look, markets move this way and that; they oscillate. Typically, they oscillate within a trend, or continuum in my terminology. Investors seek to identify those trends -- if they even consider stocks to trade independent of the parent company -- and invest accordingly. As such, different constituencies have primacy at any given moment.
This sell-off, decline, panic, or Panic, was overdone; necessity (historical tendency) required a countervailing move, which began mid-day Friday... right on schedule. More on this topic in my reply to Matthew, once complete.
Meanwhile, onwards and upwards. But for how long...?
-- David M Gordon / The Deipnosophist
Labels: Market analyses