Dow 21,000!

The President apparently said the right things Tuesday night – at least based on the stock markets performance on Wednesday.
All of the stock market indexes indicated it was a good day, but as usual the Dow captured the headlines with its close over 21,000 coming just a month after closing above 20,000. Of course, we do need to remember that a 1000 point move when the index is at 20,000 is not the same magnitude when the index is at 10,000.
This chart provides some perspective on the Dow’s market measurement.
As exciting as this new level might be, I would offer two cautions. The first is that a significant portion of the current optimism is based on things the “market” hopes congress and the president will do.
The second is our personal bias to project the current trend indefinitely into the future. This is human nature. But, it is also a bias many professional and technical experts make as well.
I still hope and expect the best is yet to come, but it is still unlikely that we will not have a period of declining returns of some magnitude sooner or later.