The only time I really enjoy watching financial media is during the time when financial markets melt down. It is fun to watch their blank faces and their dumb expressions repeating the same two questions “Where is the bottom?” and “How come no one saw this coming?”.
Today was a little bit different, but just as fun. No one could figure out why the market was surging in the morning. There was no real breakthrough or any concrete type of a debt deal coming out just yet.
Quite the opposite, their Armageddon debt default clock was counting down to a “technical” default with just a few hours left. Why was the market surging? I think everyone of them was spinning doom and gloom, yet the market kept surging.
Here is why. As I have said many times before, the stock market doesn’t follow the news. It doesn’t care about the US Government nor if it defaults on its debt. The market has an exact mathematical structure that it must trace out. It is a future discounting mechanism, not a reactionary one. It has already discounted what has happened or will happen in Washington a long time ago.
Can it get it wrong and drop down big time if the Government doesn’t pass the bill. Sure, but it will be within the range of the overall trend and not the trend change in itself.
In my future writings I will outline the exact mathematical structure of the stock market discussed earlier to prove once and for all that news have no impact on the financial markets.
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!