Abbondanza!
Worries about Greece and additional evidence of a troubled labor market hampered stocks this morning. The Dow fell as much as 53, on the heels of yesterday’s 72-point decline, suggesting profit-taking was setting in after this recent run-up.
And just as quickly as we started to digest the declines, stocks reversed course and now sit comfortably in positive territory. Strong same-store sales as well as optimism about the beginning of earnings season are being cited for the turnaround.
Hmm, weren’t those catalysts present early this morning? And unless I’m missing something, Greece’s problems haven’t been solved in a few hours and the weak labor market is, well, still weak.
Perhaps investors are merely ignoring external factors, while following a specific playbook. Buying the morning dips as well as going all-in on Friday afternoons in anticipation of Monday rallies has been the recipe for success in recent months, the Pragmatic Capitalist points out. And that’s exactly what’s taking place today.
“Apparently, the stock market has turned into an easy game,” Pragmatic Capitalist says. “Whether that is comforting or the absolute most frightening thing in the world is beyond my realm of knowledge, but history has proven that when one strategy or mindset starts to dominate it always breaks down in horrific fashion.”
Dow reversed earlier losses and was recently up 50.
