Lots of articles being written and many people questioning this disconnection of the market from the real economy....and one thing I keep hearing over and over again is that the market looks ahead, its forward looking....ummmm, so it seems that 99999999% of the time its looking ahead its always positive. I mean thats what I have gathered from seeing this said everytime there is a blip in the markets. Why the Dow can jump 400 points even as the economy destroys over 20 million jobs Published: May 9, 2020 at 3:19 p.m. ET Advisors and analysts say they have been inundated with calls from clients asking why stocks keep soaring as the economic data grows uglier by the day. They have a well-worn list of reasons: the market is forward looking and has already anticipated a sharp but short recession; there are tentative signs the outbreak has peaked; progress toward treatments and even, potentially, a vaccine; the Federal Reserve’s unleashing of unprecedented monetary stimulus and lending backstops, with the promise to do more; and a raft of federal spending aimed at shoring up workers and companies, albeit while drawing mixed reviews. https://www.marketwatch.com/story/w...omy-and-sends-unemployment-soaring-2020-05-09
It's just another bubble that's going to pop on day. All I can see is the FED bidding stocks up. Dollar is a safe heaven, People all over the world buy dollar denominated assets. But when the tide goes out do you discover who's been swimming naked.
This is interesting: https://www.bnnbloomberg.ca/the-ala...hms-as-heroes-of-the-stock-recovery-1.1432747
So if they can ramp up the stocks in Healthcare and IT the markets can rally day in and day out. The two best performing S&P 500 sectors this year -- information technology and health care -- just happen to hold the largest weights in the index. Both have fallen less than 3 per cent, and combined, the two industries make up 41 per cent of the S&P 500.
Who's driving the current market? 1. Hope! This is based on assumptions that the worst of the Coronavirus economic and health crisis is behind us. 2. Cash on the sidelines and a lot of it, FOMO is driving underexposed money managers to compete with the market using their cash reserves. 3. Bargain prices for quality and growth stocks, we are still - 15% off the recent lows. 4. Hope (again) that a cure for the coronavirus is found in the very near future, as there is an unprecedented global effort and race to develop one. 5. Positive LONGTERM view, as in markets will make a new high again, if not in 2020 then 2021. 6. Massive cash injection by the fed (QE4Ever), lifting asset prices and preventing another meltdown 7. Election - as Trump runs for reelection, he wants this so bad, coming from a business environment, every problem can be solved with... More money! And now he has the deepest pockets in the world Trade smartly, Alon
The rally continues tonight as the futures market will show at least a .50-.75% increase in futures. Another triple digit gain on dow futures tonight that will lead right into a solid green opening and continue all day long into the rest of the week. S$p 3000 this week. Yes 3000 this week!!! No going back, new highs by june!!!!!!!!!
This bear market bounce is, I believe mainly due to fed and has little breadth outside tech and healthcare sectors. House of cards that's likely to fall hard if fed pulls back. Remember how fast selloff markets move down. I'm using tight trailing stops on open longs I'm in and will aggressively buy inverses TZA FAZ etc on gaps and 2day high breakouts. If markets keep going up I'll reluctantly scale into long ETFs like TNA FAS
Now we must be careful of the jackals . They have all believing we can't drop. Everyone's going " Wow if we can't drop on 32 million people unemployed i bet when were at 20 million unemployed the mkt will be at 30k". Yeah hah free money for all. Bears are distraught . Bank stocks still dragging lows. The mkt will guide us but i'm on alert for a turn as Joe 6 pack is chasing and long . We'll see
I was messing around with this young lady about 12 years ago who daddy owned a law firm. She was pretty and nice body. Typical woman I talked to. She was driving a Benz S500. She owned it and showed me the title in her name. She said her dad bought it for her. She was out drinking one night and totaled the Benz. I said what are you going to drive now, she said my dad going buy another Benz S500 this weekend. I said, stop bullshitting these car cost alot of money. Her exact words to me was "You are poor and do not have money, so you will never ever understand how us a rich people have money" She had a new Benz S500 that weekend. It is best to get rich and stop trying to understand what rich people do.