01/18/2021 — Inexplicable Inauguration Rebound

For a brief moment, it appeared that the recent market downturn had some momentum. Maybe the weight of a fractured society that appears ripe for violent protest rattled investors unfazed by the human carnage left in the pandemic’s wake. A couple punters suggested that the proposed Biden stimulus plan left much to be desired. Sometimes the reasons behind a market slump can be as basic as there being more sellers than buyers — that is to say, no real reason.

And perhaps that’s the best explanation we can expect as to why the market decided to rebound just as quickly. At present, the S&P’s sit 30 points higher than where they closed on Friday afternoon. In the intermittent three days, nothing material arose that would warrant significant movement. Not a lot changes over a three-day weekend other than market sentiment, but that can be just as important, if not more so, than the usual concrete reasons we ascribe to the pops and dips that we trade on.

I’d love to believe that the markets move and respond rationally in accordance with newsworthy items and financial indicators. It would be nice to believe in that theory, but also far too costly.