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Buy the dip.

P.D. said:
Do you think it will go below 5K again this year?
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Hard to say. Might depend on a second spike in infections as a real nail in the coffin (sorry no pun intended).

But even without that the bad news is gonna start coming...so many businesses will fail. Qtr2 is going to be ugly, and although the gov are 'doing their best' its basically life support. Many (even large) businesses were not viable even before this, corporate debt and refinance kept them going. The corporate bond market is only saved from imploding by the Fed etc central bank money pump.

It's the ultimate never never....and probably why the markets are responding quite well but it's all a sharade. It's like it's Friday and Im buzzing coz I've just secured a new payday loan. Bring on the weekend.

The problem for a lot of sectors it's really hard to plot a path going forward as closing down, opening up, closing down and the sheer 'awkwardness' of doing business just doesn't compute if you're running on tight margins anyway.
 
Parklaner81 said:
There was a huge, immediate bounce when it dipped a fraction below below 5000. I wonder if & at what point the opposite might occur?
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This is the more than 64 million dollar question.

The government is printing money, in a way the stock market is leveraged. But governments rely on the real economy for taxation and revenue. While stocks are going up, tax revenue, company earnings etc are going down. Stock markets don't always reflect the economy, but you'd imagine there will be a moment when things rationalise. It might be when company earnings data is published.

Imo moving assets into businesses that either do well in this covid-setup or are not harmed by it is the smart strategy for the next 6 months or so. Buying bonds may be worthwhile too.

When governments inject money into the economy it is into the bond market right? Curious how this works.
 
Parklaner81 said:
There was a huge, immediate bounce when it dipped a fraction below below 5000. I wonder if & at what point the opposite might occur?
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Lots (probably most) of the stop/loss, buy signals etc are computer set and executed so they get triggered at certain levels. 5000 was probably that and has then be supported by the magic money tree.

Not sure about a sell off (for profits) though?....probably be more because of bad news stacking up the pessimism.
 
ricky2tricky4city said:
Lots (probably most) of the stop/loss, buy signals etc are computer set and executed so they get triggered at certain levels. 5000 was probably that and has then be supported by the magic money tree.

Not sure about a sell off (for profits) though?....probably be more because of bad news stacking up the pessimism.
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Yeah that's pretty much what I was suggesting. There was clearly a lot of pent-up demand on the buy side looking for a 'bargain', I'd guess 5000 was the point a large chunk of it pulled the trigger. The bounce was immediate and very significant - I'm not sure it's closed below about 5.4 since that day, and is now waaay in advance of that.

Given the outlook though (and the steep climb since March) I'd imagine there will be those looking to cash in & offload. Just a question of whether there's an obvious tipping point like there was at the 'bottom'. Seeing as many seem to like dealing in nice round figures, 6500 might be worth keeping an eye on.
 
The surprising positive US jobs data on Friday (2.5m jobs added in the USA when people were predicting 7m lost) may keep the markets up a little longer. Company quarterly earnings reports should start to separate the winners from the losers however.
 
P.D. said:
I still think if you're in it for the long term then time in the market is generally more important than timing.
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Oh definitely. Just pointing out the acute timing for ShipOfGoldblum transpired to be a bit harsh on him......no-one likes a 4% market drop the day after.

Personally....im still sidelining.
 
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