A 100 point rally in Dow Jones and everyone is out with an explanation as to why the market rallied. Now this rally was noticed yesterday but it was in works since mid July. Sector after sector stabilised. Market and certain sectors stopped reacting to more bad news.Sector like oil and energy was being slowly distributed to enthusiastic late stage buyers who believed in the inflation and 100 USD oil myth. On a more practical level if you were data mining, you could figure out emerging strength. All this was happening while the chorus of bearishness was rising.
Now if you look at what is the explanation being offered it ranges from simplistic to absurd. If you read the newspapers it is attributed to fall in oil. Some bearish commentators are out dismissing it as just short covering rally. Some are blaming the hedge fund. When in doubt blame the hedge funds. It always appeals to the masses.
At the other extreme , I read with lot of interest the explanation for yesterdays gain as vast Fed conspiracy. Now it is on a blog which is extremely popular probably one of the most popular trading blog. So according to this market guru the Fed controls everything and it decides to take gold down, drive equities up and sells oil. It is one huge Matrix controlled by the Fed and the evil Bush administration.(Hey Ben Bernanke can you send the girl in the red here please)
If you believe this kind of non sense , you should stop trading. What is the point of trying to go against the Matrix. How come this is still a secret. Why is it not on the front page of the liberal rag-The New York Times. Can you imagine a secret programme run by Bush to manipulate the market and Bill Keller is not even aware of it. Probably he is also part of this vast controversy.
Denial ain't just a river in Egypt.