Dow Back at Record Highs – Where’s the News?

In early September I wrote an article that asked the question, ‘Is it back to buy the dip or time to sell the rip?’
Since the publication of that article, the Dow has moved up over 900 points off of the low that was struck on September 5th. So clearly the answer to the question asked early this month was that it was still indeed time to buy the dip on the Dow Jones Industrial Average.
We now ask how much higher can the Dow go prior to seeing a significant retracement as we enter the final quarter of 2017?
The past month has not been filled with good and or happy news. We have seen three major hurricanes make landfall on U. S. soil, terror attacks both in the U. S and in abroad, missile launches over Japan from North Korea, more failed attempts to pass legislation in Washington and an FBI raid on President Trump’s campaign manager. Any of these events could have very easily been used by the media as the ‘reason’ for a drop in the markets.
Many have been expecting the market to “react” to all of this bad news and move lower. Of course, the markets have done just the opposite as the Dow has now trading at all-time highs. The fact that the market did not ‘react’ as people might have expected it to do on such a string of bad news has made many angry and repulsed.
While the events over the past month have been tragic, and quite literally evil in the case of the terror attacks, the markets simply brushed off these events as if they didn’t even matter. Of course, the reason why the market brushed off these events is really quite simple to answer. Simply stated, none of these or any other exogenous news events matter to the market. The only thing that does matter to the market is the sentiment of those who are speculating in the market.
Only when that sentiment once again turns negative will the market begin to “react” and correct lower. Of course, there will very likely be some kind of bad news that the pundits will attempt to assign the correction in the market. Once again re-enforcing the cause and effect theory that is so prevalent in the mainstream financial media today.

This post was published at GoldSeek on 5 October 2017.