The stock market keeps showing up to the party making new highs.
The S&P 500 is there. The Nasdaq 100 showed up early and already took over the music. The Nasdaq Composite is dancing on tables.
Small caps made it. Mid caps made it. Even a bunch of the equal-weight indexes are hanging around near the cooler talking about how broad this whole thing has become.
But where’s the Dow?
Seriously. Has anybody seen it?
The Dow Jones Industrial Average hasn’t closed at a new all-time high since February 10. We’re already two-thirds of the way through May.
Three-plus months. No new highs:
That’s weird. Not bearish necessarily, just weird.
And I know what some of you are thinking, “Who cares about the Dow?”
Trust me. I used to be that guy.
I Used To Think I Was Too Cool for the Dow
When I first got into this business, I thought the Dow was for old guys in suspenders yelling on the floor of the exchange.
I was an S&P 500 guy.
Institutional. Professional. Modern.
I thought I was cool beans walking around Midtown Manhattan in a cheap suit pretending I knew things.
What a little punk I was.
Because the older I get, the more I realize nobody knows anything. And the market has a funny way of humbling people who think they’re smarter than the tape.
One thing I learned over the years is this: You don’t fight Papa Dow.
You can ignore it if you want. A lot of people do. But when the Dow starts acting differently than the rest of the market, I pay attention.
Not because the Dow is magic. Because the Dow is old money.
The Dow is industrials. Financials. Multinationals. The big boys. The companies your grandfather owned and your golf buddy still owns.
It’s the index people stopped respecting right before it quietly became important again.
And Papa Dow has left the party.
Maybe Papa Dow Just Went To Get More Beer
Now, before everybody starts screaming “divergence” and “market top” and all the other dramatic things financial television loves to do every seven minutes, let’s relax for a second.
Maybe the Dow just stepped out for a little while.
Maybe the party ran out of beer.
Maybe Papa Dow looked around and said, “What is this garbage you people are drinking?” and went to upgrade the operation.
Maybe it went out for wine.
Maybe champagne.
Maybe a sleeve of Fireball nips and a pack of cigarettes.
I don’t know.
Maybe somebody at the party had one too many tequila shots and Papa Dow drove them home like the responsible adult in the group.
Entirely possible.
Meanwhile, the rest of the market kept the music going.
Tech stocks? They never went to bed. Semiconductors are still doing semiconductors things.
Speculation came back. Crypto’s awake again. Small caps started participating. Breadth expanded underneath the surface.
Objectively, a lot of things are acting exactly the way you’d want them to act in a healthy bull market.
Which is why the missing Dow stands out even more.
Because if everything is so great, where’s Papa Dow?
The Thing About Missing Guests
Here’s the part people forget about markets.
Not every index needs to make new highs at the exact same second.
That’s not how trends work. Leadership rotates.
Sometimes the Nasdaq carries the torch. Sometimes small caps catch up. Sometimes energy takes over.
Sometimes the boring old industrial names wake up after doing absolutely nothing for six months and suddenly become the life of the party.
Markets breathe.
Honestly, maybe that’s all this is.
Maybe the Dow disappeared for a little while, but will come walking back through the front door fully recharged ready for another run at the beer pong table.
Maybe the next leg higher belongs to the stocks nobody has cared about recently.
Maybe this is rotation, not deterioration.
But until Papa Dow comes back, I’m going to keep watching.
Because when one of the oldest and most important indexes in the world stops confirming all the excitement everywhere else, I don’t think that’s something you dismiss with a wave of the hand.
The market’s throwing one hell of a party right now.
I’d still like to know where the Dow went.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs