Events move markets but the big questions are when and which ones

By Dian Vujovich

The stock market’s seemingly non-stop bullish trend is a little unsettling. In this day of spooky high- frequency trading where computer programs control more prices than many would care to admit, it’s important to be cognizant of the fact that this market isn’t like your father’s. Or for that matter, his father’s.

To be clear, dad, grandpa and grandpa’s grandpa understood that stock prices don’t follow a straight line upward. I don’t know of one publicly traded company whose per-share price did not gyrate up and down over its trading lifetime. The same can also be said for market corrections: Once the market begins to fall it doesn’t fall forever.

So market high’s and low’s are as much a natural part of trading as is breathing in and breathing out.

But today’s stock market seems a bit confusing. In the old days, global turmoil, like the unrest and wars in Iraq, the Ukraine and Russia—not to mention America’s own racial conflicts—could easily have caused investor’s emotions to be rattled enough to take some of the zest out of a bull market. Not so today.

Domestically, a combination of things like inflation, a dramatic change in interest rates, oil prices, crime, terrorism, unemployment, domestic unrest, corporate earnings, huge wage gaps, etc. could bring a bull market to its knees. Not so today.

It has been reported that monthly momentum indicators for both the S&P 500 and Russell 2000 have turned bearish for the first time in three years, (since 2011) Nonetheless, the bulls continue to barrel down Wall Street.

Predicting when a change in market direction will occur and which events will trigger it is always a mystery. In the past everything from tulips to the Great Depression, Asian markets, dotcom’s, housing and credit have all caused markets to fall significantly.

So while the coming catalyst is currently unknown, one thing is certain: The day will come when the market correct/crashes and it will be followed by a time when that crash or correction is corrected.