Mainstream financial journalism and traditional Wall Street hold a very basic assumption that impacts everything they say and do. That assumption is that it is good when the indices are up and it is bad when they are down.
This bias is a product of several things, but it mostly is caused by the assumption that everyone is a buy-and-hold investor and is fully invested all the time. When you assume that everyone approaches the market like a buy-and-hold mutual fund, it makes it easier to address the emotions that are impacting your readers and viewers.
If you are not a long-term buy-and-hold investor, the '"up is good and down is bad" bias is not just annoying, but at times misleading and wrong.
We had a good example of this on Tuesday. There was a collective sigh of relief among many market players when the indices finally broke their streak of 11 straight days of closing higher than they opened.
Some of the folks who were happy to see the downside action were bears and shorts, but many more were those who have a bullish bias and are struggling to put cash to work. Downside action is what is needed if you want to put money to work.
This is something we never hear about in the business media. There is never any talk about the strategy used to put cash to work. The assumption is everyone is now 100% long and so we should root for the market to go straight up without a pause.
The business media need to have some simple conventions to make it easier to present the news, but traders need to be very aware that what the media are rooting for may not be in their best interest. It can be very disconcerting when all the folks on television are talking about how fantastic the action has been while you are still struggling to find more stocks to buy.
Tuesday's pause in the relentless climb is reversing here on Wednesday as good earnings from IBM Corp. (IBM) , United Technologies Corp. (UTX) and TD Ameritrade Holding Corp. (AMTD) deliver strong earnings report.
There also is some hope that a deal will emerge to end the government shutdown and we never know when a positive headline on China trade may hit.
The market is bouncing back up here on Wednesday morning and the folks in the business media are doing high fives. Traders and investors may not share the same positive emotions as they try to find prudent ways to put idle cash to work.