The smart money herds the sheep back into the market then exit fast.
Financial media is the original Fake News.
A market like this doesn’t end this quick. We are looking at massive volatility until year end.
The last three days is a rally that will probably be met with a lower low.
2002 and 2009 saw a 45-50% decline, and that is potential here too.
Some might call this a dead cat bounce, a symptom of fed money rushing in, shorts cashing in, longs picking off some bargains, traders making a rally move.
-28 yrs of finance career and counting...
I think they took Trump’s “Back in Business by Easter” to heart.
What happens if that doesn’t pan out?
Dow bottoms at 10000 or less before this bear market is over.
With that much experience, you should have more money than Bill Gates.
The smart money herds the sheep back into the market then exit fast.
You have to look at volume, if it's high than it's more than just a few bargain hunters and short coverers propelling it up for a day. The other day the 2,000 point rally they had was on really high volume. I can't check todays but if that's the case here, it's good news. IT means the institutions are staying long.
But then again I'm a very simple investor now, I lost a lot of dough trying to trade individual stocks in the middle of the tech bubble (like trying to swim in a typhoon, you're going to end up under water no matter what you do). Since then I've been more inclined to hold few index funds and some bond funds and I set a target percentage of stocks vs bonds and I move money quarterly accordingly. So my technical acumen is very rusty.
4 trillion in Fed asset buying is not bupkis.
“A market like this doesn’t end this quick. We are looking at massive volatility until year end.”
We are in uncharted territory here. This crises was not caused by any financial breakdown. It was caused by the fear of what may happen with the introduction of the China Virus. The media induced and promulgated panic was what caused the sell off since we know the market tries to “see” 6-9 mos down the road and buy (or sell) accordingly. Initially the were pricing in an Armageddon event so the huge sell off but with additional information becoming available the reality is beginning to set in that this will not be a world ending event and the stimulus is believed to be very helpful in getting us thru this.
A good analogy would be to imagine what would happen to our markets if a gigantic meteor were sighted on a collision course with earth and it was thought it would hit the North East United States. The markets would immediately tank big time, gold would sky rocket etc. Then 5 days after the bad news it was announced there was a mistake made and the meteor would actually completely miss us. The markets would sky rocket back to where they were because their was no damage to the economic fundamentals.
This event we are going thru is similar. Although there is economic damage done now the huge stimulus is helping greatly to get us thru it. All the money being sent to individuals and businesses will flow back into the economy propping up consumer spending which is 2/3 of our economy.