The Dow climbed 500 points Friday because oil got cheaper and nobody wanted to talk about the inflation report anymore. Four days of losses ended. Confetti fell from the ceiling of absolutely no trading floor because those don't exist anymore.
Oil cooled. That's the whole story. The thing that was expensive became less expensive and everyone decided this was worth 500 points of enthusiasm. Not because earnings improved. Not because productivity surged. Not because anyone invented anything. A commodity mean-reverted and grown adults with Series 7 licenses threw a parade.
The inflation report came out and traders looked past it. Beautiful phrase. Looking past something. As if ignoring a number makes it less real. Your rent didn't look past the inflation report. Your grocery bill didn't look past it. But Jeff in his Patagonia vest at a prop desk in Stamford looked past it and now we're all supposed to feel bullish.
This is the fourth time this year the market has snapped a four-day losing streak. I checked. Each time the headline writers acted like it meant something. Each time retail traders refreshed their Robinhood accounts and convinced themselves they'd timed it perfectly. They had not timed it perfectly.
The S&P closed up. The Nasdaq closed up. Volume was decent. Breadth was fine. Every technical indicator said the same thing it always says, which is nothing, but with more decimal places this time.
Someone on CNBC called it a relief rally. Relief from what? From the horror of four consecutive red days? There are people who work actual jobs who would weep with gratitude if their worst month was a 2% drawdown, but we're supposed to treat this like the market survived a plague.
The VIX dropped. Naturally. Fear gauge goes down when prices go up. Stunning stuff. Really cutting-edge financial engineering happening there.
Monday the Dow will move again and someone will write another headline explaining why, and that person will also be lying.
Photo by Maxim Hopman on Unsplash
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