The consensus said there’d be 200k new jobs found last month… They were off by 80k…The consensus said China would see a 3.3% inflation rate for March. They were off by 30 basis points… Last week, famed strategist Byron Wien forecast higher stock prices for the remainder of this year… Mark Faber (editor and publisher of The Gloom, Boom and Doom Report) says the “market’s at the start of a more significant downturn”…
So what’s the market going to do come tomorrow? Just like any other weekday, it’ll simply do its thing – provide the auction platform for individuals to react to the latest news/opinions by swapping cold hard cash for shares of corporate stock…
Two Monday’s ago, on comments from Ben Bernanke, folks with cash came to market in search of shares… Of course the owners of shares became all of a sudden stingy… They forced the buyers to pay dearer prices than they would have the Friday before… The Dow Jones Industrial Average (an index tracking 30 stocks) jumped 160 points…
Last Friday, the blah jobs number was announced… The auction was closed (it was Good Friday)… I suspect come tomorrow morning the owners of shares will be the ones coming first to market… In fear of suffering the paper loss of this year’s paper gains, they’ll be offering up their shares to the highest bidder… Problem is, the bidder’s will be all of a sudden stingy… They’ll force the sellers to sell at less dear prices than they would have last Thursday… Look for the Dow to fall triple digits at the open…
So who are these buyers and sellers – these reactors to news? They would be the trained-trader, the untrained-trader and the untrained-investor… Everyone except the trained-investor… That’s you… You watch the news, you shrug your shoulders, you go to work, or golf, or tennis, or swimarobics, or whatever… You know that if the market trades lower between now and your next rebalancing date (like last fall) you’ll be a buyer… If the market trades higher between now and then (like this spring) you’ll be a seller… You’re forever buying while stocks are falling, and selling while they’re rising…
Your world is simple, calm… You don’t worry, you be happy :)…