This post Did Trump Just “Top Tick” the Stock Market? appeared first on Daily Reckoning.
Say what you will about the president, but he certainly knows how to ruffle feathers on Twitter.
The Dow Jones Industrial Average crossed 22,000 for the first time ever this week. I’m not sure if they handed out “Dow 22K” hats on Wall Street for this mediocre milestone, but the moment was not lost on the commander-in-chief.
Trump’s first order of business was to hit the internet to boast about the market’s impressive rally, reminding everyone that stocks have continued to climb to new highs since he was elected president…
Less than a year ago, these little Dow milestones were celebrated within the confines of the financial press and market participants (some taking them more seriously than others).
Not this year.
The bull market is going mainstream. The financial media had a field day when the Dow crossed the magical 20,000 mark on a cold morning back in February. The excitement was palpable – even though investors were ready to party in December. But thanks to several stalled-out attempts to crack 20K, we were forced to wait two agonizing months for the real breakout.
The rest is history. 21,000 was breached just a few weeks later. Now, 22K has whipped the bulls into a frenzy.
Even Drudge is getting in on the action…
Of course, these little 1,000-point celebrations are completely ridiculous. And it certainly feels like everyone is getting a little too giddy about the bull market.
But I wouldn’t be surprised if Trump’s tweet marked the beginning of a late summer pullback in stocks. Anyone who’s been involved in the trading game long enough knows that whenever you start to get cocky, the market finds a way to knock you down a peg or two.
As we mentioned earlier this week, August can be a trying month for traders. A 5% pullback would scare plenty of weak hands out of stocks and provide the perfect setup for a blazing fourth-quarter rally. Most investors have forgotten what a pullback even feels like. Even a mild correction could induce some serious short-term panic.
Ultimately, Trump’s bulled-up Twitter rants probably won’t kill this raging bull market. But it would be nice if the media would stop contributing to the round-number madness that has consumed so many market watchers this year.
As the Wall Street Journal reminds us, 1,000 points ain’t what they used to be…
“It took only 42 days for the Dow to reach 20000 from 19000, then a mere 24 days to hit 21000 — tied for the fastest-ever 1,000-point advance. That streak, from January 25 through March 1, saw the Dow rise 0.2% on the average trading session,” the WSJ notes. “Of course, the Dow’s 4.8% march to 22000 from 21000 sets the record for the smallest percentage gain required to move 1,000 points. Simple math shows that, as the Dow runs higher, each 1,000-point rise is less impressive than the last. For example, the climb from 10000 to 11000 equated …read more
Source:: Daily Reckoning feed
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