The S&P 500 closed at a record Friday. Best week since April. Retail traders everywhere checked their accounts and felt something they mistook for competence.
April was four months ago. That's the benchmark now. Not last week. Not yesterday. April. The market went up for five days in a row and financial journalists ran the same story they run every time numbers go up: numbers went up.
Here's what actually happened. Price made a higher high. Volume existed. The close was higher than Thursday's close, which was higher than Wednesday's close. Repeat until Friday. None of this required a headline. None of this required analysis. A third grader with a ruler could have drawn the trendline.
But somewhere right now a guy named Derek is texting his brother-in-law about momentum. Derek bought calls on Wednesday after reading the headline about Tuesday's rally. Derek thinks he timed it. Derek believes the weekly performance matters because the article said strongest and April in the same sentence. Derek will hold through next week's consolidation and sell at breakeven while complaining about manipulation.
The chart didn't read the article. The chart doesn't know it posted its best week since April. The chart is just price and time, and price already moved before you heard about it moving. That's how markets work. That's how they've always worked.
Records get broken because that's what trending markets do. They make new highs. Then they make higher highs. Then someone writes a story about the higher highs using words like surges and posts and momentum. Then the highs stop being higher. Then someone writes a different story.
The three major averages don't have weekly performances. They have prices. The performances are something we made up so Derek would click.
Photo by Olha Ivanova on Unsplash
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