It’s funny listening to the stock market pundits try to explain the stock market drop the past few days. Though the drop in the Japanese yen and inverted yield curve have received some air time, the coronavirus outbreak seems to be winning the latest hair-on-fire narrative being spewed by the main stream media.
Watching Tesla the past few months sure looks familiar. The meteoric rise in the stock brings back memories of the dot-com bubble.
Since the day after Christmas, 2018 the U.S. stock market has been on a tear. In fact, 2019 will go down as one of the strongest in history.
For those of us who trade for a living, after a time we notice a pace, or rhythm to the market. If looked at on a chart, the rhythm takes the subtle form of waves, a drift between the constant pull of buyers and sellers grappling for control of sentiment and price.
Last month we wrote that U.S. stocks had been trading in a fairly tight range for the past several months, and that we were patiently waiting for a break out of that range to provide the direction for the remainder of the year.
The 3rd Quarter just ended with not much to show for itself. After six months of up, up, and away, the past three months were basically flat for the stock market, despite the main stream media’s best attempts at driving it lower.