Stock Trend Continues

The market rallies because AOL buys the Huffington Post? Really?

Okay. Maybe the reasons du jour are big piles of cash leading to mergers and acquisitions, increasing dividends and share buybacks. But the market continues to advance.

This just shows how markets behave when trending. In bull markets, all news is reason to buy. Egyptian riots? $4 gasoline? Budget deficits at all levels of government? Underfunded pensions? Collapsing European economies? A nuclear Iran and defiant North Korea? An employment picture where people just quit looking for work while the government extends unemployment benefits forever?

It all means that stocks are undervalued.

So why fight the trend until it matters? The bottom line is that the headline news doesn't matter much. The trend is all about how investors react to the news.

Right now, investors want out of gold and bonds, and into stocks.