Just A Reminder - Market Analysis for Feb 28th, 2026

Many of you may have noticed that I did not mention a single word of the Middle East in my weekend analysis.   I am probably alone throughout the entire internet in that regard.  And, the reason is that the market is likely going to do as it is set up to do.  

To drive this point home, I challenge each and every one of you to show me an instance when a war breaking out was a “cause” for a market decline, and I can probably show you just as many examples as it was a “cause” for a rally.  Has anyone forgotten that the SPX began a 15% rally on the actual day that Russia invaded Ukraine? And, the same perspective applies to silver and gold.  

So, if you REALLY have learned you market history, then you realize this is simply “noise” (which sadly entails many innocent deaths) as it relates to the direction the market is going to head in the coming week.  And, if you have not, then I suggest you check your market history before posting about how the market is certainly going to decline or how gold is certainly going to rally.  It may surprise you.

And, to remind you of some of the studies that support what I am saying:

In August 1998, the Atlanta Journal-Constitution published an article by Tom Walker, who conducted his own study of 42 years’ worth of “surprise” news events and the stock market’s corresponding reactions. His conclusion, which will be surprising to most, was that it was exceptionally difficult to identify a connection between market trading and dramatic surprise news.  Based upon Walker's study and conclusions, even if you had the news beforehand, you would still not be able to determine the direction of the market only based upon such news.

In a 1988 study conducted by Cutler, Poterba, and Summers entitled “What Moves Stock Prices,” they reviewed stock market price action after major economic or other type of news (including major political events) in order to develop a model through which one would be able to predict market moves RETROSPECTIVELY.  Yes, you heard me right.  They were not even at the stage yet of developing a prospective prediction model.

However, the study concluded that “[m]acroeconomic news . . . explains only about one fifth of the movements in stock market prices.”  In fact, they even noted that “many of the largest market movements in recent years have occurred on days when there were no major news events.” They also concluded that “[t]here is surprisingly small effect [from] big news [of] political developments . . . and international events.” They concluded that:

“The relatively small market responses to such news, along with evidence that large market moves often occur on days without any identifiable major news releases casts doubt on the view that stock price movements are fully explicable by news. . . “