The charts are in control of our minds, if not the action itself.
Consider: a week ago, all I heard was that Goldman Sachs (GS) had lost it, that it was no longer keeping up with the other big banks, that its fixed income department had laid it low. Whatever.
But in the last five days, this stock has been on a remarkable tear. Suddenly, I am hearing about a turn in fixed income, and that Goldman had to catch up and it is just a matter of time!
(If you want to take a look at GS's chart and what it says about this stock going forward, click here for an article by Bruce Kamich).
Then we have nothing but trade tension with the Chinese, and the steel stocks are going up and down on every bit of information about North Korea or Chinese intellectual property talks or tariffs.
Next thing you know, Trump holds back on both defense protectionism -- 232 -- and intellectual property, while the overall Chinese numbers show a slowdown in infrastructure spend.
But during this whole passel of negative news, Alcoa's stock has done nothing but go up just when it should be going down -- unless published, but unconfirmed reports of big Chinese smelting shutdowns really are true.
Or, how about Lam Research (LRCX) ? (Kamich believes the trend is still up.) The company reports a true blowout number and the stock rallies for about 30 seconds and then does that amazing pirouette we see at the end of all big moves and plummets from $167 to $149.
There, when everyone has pronounced the semiconductor capital spending cycle kaput as only stocks that go down on good news give you such a signal, it explodes higher on no news whatsoever.
So then we try to put a story together to justify the stock's comeback.
I think in each case the stocks are indeed leading us in some direction based on the fundamentals.
But here's the question. At each fulcrum moment, at each key reversal, nothing happened.
Goldman didn't suddenly get better. Nor did Alcoa. Nor did Lam Research.
Which is why, in the end, this really fabulous market often feels far more treacherous than it looks.