The flow of institutional money into stocks is under such expert control these days that we shouldn’t doubt DaBoyz’ ability to manipulate the broad averages to new record highs regardless of economic headwinds. On days when the FAANGs are soft, which was the case on Thursday, the Dow is firm. Conversely, when the FAANGs are raging, the Indoos are often subdued. This suggests that even though there are still large sums of fresh cash available to throw at the stock market each day, including surplus corporate funds with no better purpose than endless share-buybacks, portfolio managers still find it necessary to ‘work’ the money hard, rotating it constantly in order to levitate stocks as efficiently and convincingly as possible.

Panicky Bears’ Star Turn

It helps that they are never in a hurry to achieve new record highs, which is the best way to regularly tweak the public’s interest in stocks. In this task they can always count on the most powerful kind of buying there is: short-covering by panicky bears. The poor saps can be summoned at nearly any time for this chore, most particularly in the wee hours when volume is thin and the usefulness of “news” highest. The effortless overnight waft is usually completed by the opening bell with relatively little money or stock having changed hands. On nights when hoards of spooked sellers get in the way the opposite strategy is used: pull all bids and let stocks fall until the bears are spent; then, run ’em back up the old wazoo on near-zero volume. Rinse and repeat. Knowing how the game is played will not necessarily make us rich, but it can keep us from being steam-rollered when the bull market seems to stand logic on its head.