50 Reasons Why This Bull Market Has Longer To Run
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
I always love reading titles to articles that tell me I am about to read a bunch of "reasons" as to why a market is going to do something. So, I thought I would write my own.
When someone presents you with such an article, this is what they are really saying:
The stock market is logically going to decide to move in a specific direction because the reasons for it to do so are stronger than the reasons for it to move in the opposite direction.
Ultimately, the underlying premise of these articles is that a market moves based upon logic and reasoning.
So, let me ask you some questions:
With what logician did the analyst consult in order to come up with their analysis?
And, when was the last time you read analysis from a logician in order to determine the direction for the stock market? I mean, would it not make the most sense for logicians to provide analysis for the stock market if one believes that we should be looking into reasoning for the market to move in a specific direction?
Yet, I am quite certain that none of you have ever read any logicians for market analysis. Why is that?
Let’s think about these questions. If you read and believe articles or analysis providing you reasons as to what the market will or wont do, are you really not believing that the market itself is a reasoning or logical environment? If so, then would not a logician be the most sought after analyst for any investor?
But, I am also certain that when I suggested it above, each of you likely just shook your head and thought I have completely lost it. Yet, while you shake your head at my questioning now, in practice, this is how you view the market.
Each time you believe in reasons as to why a market will move, it means you inherently believe that the market moves logically. But, anyone who has had any real experience with the market knows that this is a completely false premise. Yet, even though you may inherently know this premise is false, most of you still read and believe those articles about the multiple reasons as to what the market will do.
I am sorry to burst your bubble, but this is yet another exercise in futility. Believing you can reason with a market, which is clearly an emotional environment, is akin to trying to reason with your spouse when they are being emotional. How well does that work for you?
While everyone has been so concerned about how the escalated trade wars will affect the stock market, it does not seem as though the market has been listening to the news and the pundits, or even cares. Rather, the stock market has basically ignored all talk about trade wars having negative implications, and has continued to rally, as most market participants look upon it in disbelief.
Despite what you have been told to the contrary, the market really does not care about all the trade war discussion. And, even after this latest 200 million escalation, the market continued to rally, as it has now reached our short-term target in the 2800SPX region. At this point in time, I am expecting that we will likely see a pullback. But, the question is how deep that pullback will be.
Ultimately, the market does not really have to even break below 2700SPX to remain bullishly pointed to the 3000 region. Any break below 2700SPX in the coming weeks should be viewed as a gift, as the market seems destined to strike that 3000 region in the coming months.
So, if you are going to complete my article, and then move on to the latest published articles providing you with a host of reasons, consider this. We have had a multitude of reasons as to why the market would not reach the 3000 region we predicted many years ago - Brexit, Frexit, Grexit, rise in interest rates, cessation of QE, terrorist attacks, Crimea, Trump, Syrian missile attack, North Korea, record hurricane damage in Houston, Florida, and Puerto Rico, quantitative tightening, trade wars, etc. And, the market simply has not cared.
In fact, when the market was in the 1800SPX region in early 2016, I was pounding the table while pointing to 2600SPX+. And, when the market pulled back into the November time frame in 2016, I was again pounding the table and pointing to the 2600+ region no matter who won the election. And, throughout all of 2017, I was still pointing to 2600+.
You see, as I have tried to explain so many times, exogenous events do not drive the market in the manner that so many falsely believe they do. So, while you continue to read all those articles that provide you with “reasons” as to what the market will do or has done, I am here to tell you that you are simply wasting your time.
And, as I said last week, I am quite certain that someone will be posting a snide comment below about our analysis methodology and how "squiggly lines cannot predict the market." Well, considering how well we have been able to predict this market over the last number of years despite all the "reasons" you have read which were supposed to have crashed this market long ago, I would say that those “squiggly lines” certainly have the much better track record.