Rallying For The Win

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While the Christmas Eve major point drop on the DOW certainly was painful, following a very bad week or so before that in the markets to boot, I said "Do not panic." And today we got to enjoy an over 1000 point rally in the markets which also happens to be a record gain in a single day. Santa Claus has come to Wall Street after all. This is not to say that things do not need to be watched. It is not to say that the volatility is over. It's just to confirm for me something I have believed during the recent drops... There is absolutely nothing fundamentally in the economy to suggest we are headed for a significant downturn in the markets. These are what I like to call hiccups. Part of the issue is really the fact that nowadays we have quite a lot of automated investing going on. Lots of stop limit orders are in place, and other limit orders are in place. All of these things trigger when markets do one thing or another, and soon you have a whirlwind effect where all sorts of automatic trades get triggered and markets sell off or rally. So long as the underlying economic data is strong, and it is VERY strong, I don't see any near term issues with the stock market overall. I stand by my judgement and bought more shares this morning before the rally really hit. Now we will just have to see what tomorrow brings.