any rally will be short lived. Maybe we get a short covering rally when the senate finally pass a stimulous package. The package better over delivery or else we will get more selling. Any stimulous rally will be short lived as well because ultimately stocks are priced based on valuation and future valuation. There will be NO earnings visibility. Apple has another 50-75 points down as does NVDA and a bunch of other chip stocks.
My observation after the .COM bubble, 2008 crash, Greek banks collapse and other crisis is that the market bottoms before people stop panicking. (Past performance is not indicative of future results and not a trading recommendation).
I hear you Matt but i truly believe this is worse than the financial crisis. The fed was able to wrap their arms around that crisis with some bail outs and monetary action. They could also look at balance sheets and get an idea of how bad things could get. This is no mans land and although we will recover, the damage to the economy and consumer confidence will be worse. Hopefully this is quick but i see another 10-15% downside on the averages.
I think we bottom somewhere between 1700 - 2000. I also think the recovery could be quite quick. Once the virus is gone, there will be a ton of liquidity and stimulus to lift the markets in the US and around the world.
I don't disagree with you and my statement was general. I didn't not mean to pick bottom during such unprecedented times.
I agree. That was the idea behind the CCAR and DFAST. Stress tests won't matter if we keep hemorrhaging money. It's like scooping water from a canoe with a hole in it. As long as they refuse/don't plug the hole effectively, the leak will continue. This is a multi-pronged problem. The problem with this stimulus is: who and how will one spend the money? People are not spending, not just because they can't, but also because it's down right difficult to. No parks, no movies, no clothes shopping, no dining out. You can pay every American's bills and it would do nothing until you fix the threat of disease. Not to mention that they will continue to be unable to pay their bills until the economy reopens. How can they spend in a shuttered economy?
Eventually people will come back out. Humans are social butterflies. Once we see for ourselves 10-20 -100 of our friends get the virus and come out of it just like they do a flu people will be like f**k that . The government will not be able to order this quarantine indefinitely, I’m not an attorney. Older people have higher risks then that is who we need to focus on. Some of them don’t even care from my personal experience and would take the risk of venturing out. Time will tell Besides we have no idea how much of anything is factored into the market. All we can go by is personal experience of the last several times this has occurred and it’s always been a win win to dip your toes strategically and buy the monster of all dips lol and it doesn’t have to be the exact bottom if you don’t use leverage and don’t need the funds for years to come.