Featured Prediction Comes True

If it was a simplistic as you think the market would have rebounded in one day after the Fed gave reassurances, and not taken 3 weeks.

On the one hand you say the Fed is buying up too much of our debt and propelling the stock market, and now you are saying that they are artificially squeezing out other entities, and if they would only get out of the way the market would be fine. You do realize that there is little demand for US securities which is why the Fed has to buy them to keep interest rates low? If no one was buying them the US would need to increase yields in order to attract outside buyers.

Big deal. Yields are historically low. Any movement, even the paltry 0.17% increase recently is going to look big.

Good, the market is starting to increase yields ahead of the Fed's anticipated announcement to start tapering.

< snip off topic crap >

 

This is what your ilk was predicting back in late 2008 and 2009. Rioting in the streets, martial law, food riots, etc.

"There is a wolf chasing the sheep!"
"There is a wolf chasing the sheep!"
"There is a wolf chasing the sheep!"

 

And now we have this...(it hit 1925.76 at 3:46 pm EDT today, which was a new record)

 

Boy, did you pick the wrong endpoints! In the last four months the S&P is up 10.4%. Overall, the S&P500 is up 5% since the start of the year. A 5% increase over 6 months is hardly unchanged.

Chart is mostly irrelevant.

Yeah...you might want to check your data. The price of gold YTD is essentially unchanged; the S&P500 is up 5%. If you look at this chart your selective endpoint picking of mid-March was working for you with gold, currently it's not.

 

S&P 500 topples another record; benchmark hits 2,000

U.S. stocks rallied on Monday, with the S&P 500 crossing 2,000, lifted by a round of corporate deals and optimism that the European Central Bank would embark on further moves to stimulate the European economy.

Cue the naysayers! Ha!

(Preemptive comment: Yes, Virginia, there will be a correction.)

 

Same thing that always causes market gains--Strong corporate earnings. GDP growth was strong last quarter after a bad first quarter. Also positive trends in consumer spending and confidence and positive jobs reports.

The Fed's quantitative easing program is almost completely tapered to nothing (and wasn't that much anyways), the market knows there will be interest rate increases and will react when they occur.

 

There are 500 companies that comprise the S&P 500 index. There are 3,000 companies in the Russell 3000 index. All these companies report audited financial results every fiscal quarter. Are the majority of them lying about their results? Not likely.

If the whole truth was being withheld to maintain the market, they (whoever "they" are) sure have taken their sweet time with the recovery. This is the slowest recovery in history. If you were manipulating the economy why would you have this drag out so long?

 

It is circular reasoning. Consumer confidence is up because the stock market is up. The stock market is up because consumer confidence is up. Repeat. It doesn't work that way.

The earnings reports are real. This is what is driving the stock market. Probably 70% - 80% of it. Consumer confidence, employment, housing starts, all that other data is bonus stuff that adds on top of the earnings reports which gets the stock market to new highs.

The Federal Reserve knows the employment situation is not strong, that the numbers are deceiving. Fed chair Janet Yellen continuously addresses that, including recently. Wall Street knows employment is not strong.

Same thing with the bond buying program. It's been tapered down to almost nothing. Wall Street knew it was going to end. Same thing with interest rates. They will go up. When? Sometime next year. Meanwhile if the Fed keeps telling people that interest rates are going to rise and gives hints as to when that will occur, it softens the shock and acclimates investors to the idea, thus (hopefully) heading off any massive losses.

Aside from automatic payroll deductions for 401k, I'm not investing in the market right now. Stocks are a bit overpriced. The market is setting new records almost weekly. I'm sitting tight on my current positions but I have a little bit kept aside for when the correction occurs so I can snag some bargains.