Poll

This week's market increase is most likely...

The beginning of a gradual 6th month climb back to 30k, we're past the worst of it
The beginning of quick run back up, markets no longer spooked, let's keep the party going
A short term positive correction but more sub 20k days are definitely coming
Impossible to say where the markets are going, full scope of pandemic still a complete unknown
None of the above

Author Topic: How do you explain the recent run up?  (Read 1772 times)

CrankAddict

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How do you explain the recent run up?
« on: March 26, 2020, 05:02:21 PM »
There are so many thoughts spread over multiple threads I thought it would be interesting to have a consolidated poll of what you all think about the last 3 day's run.  This is NOT an attempt to say "oh ok, in that case let's do some market timey bs" but rather just asking for opinions from others that follow the markets.  The real answer of course is "who knows" but I'm curious what the "but if I had to guess" answers look like.

Stachless

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Re: How do you explain the recent run up?
« Reply #1 on: March 26, 2020, 05:24:02 PM »
I went with 'none of the above' as I am a firm believer that the Market hates nothing more than...uncertainty.  Bad news (like 3MM+ lost jobs last week) can be quantified and priced, while uncertainty leads to panic.

Even 'fake certainty' aka 'alternate facts' such as the USA is back to work by Easter is better than the great dreaded unknown.

For the record - today is the first day of the 'new' bull market in the DJIA!  That was easy....eh???

John Galt incarnate!

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Re: How do you explain the recent run up?
« Reply #2 on: March 26, 2020, 05:36:22 PM »
There are so many thoughts spread over multiple threads I thought it would be interesting to have a consolidated poll of what you all think about the last 3 day's run.  This is NOT an attempt to say "oh ok, in that case let's do some market timey bs" but rather just asking for opinions from others that follow the markets.  The real answer of course is "who knows" but I'm curious what the "but if I had to guess" answers look like.

I clicked on impossible to say ...

My guess is that  some investors bought stocks in the last 3 days because they know that 50-60% of the time the stock market's best surges occur within weeks of it worst plunges.


Garrett B.

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Re: How do you explain the recent run up?
« Reply #3 on: March 26, 2020, 06:19:34 PM »
A few reasons:

1. Trump provided the markets with some degree of certainty my claiming the country will be back to normal by Easter.  Even if it's fake certainty; markets crave certainty.

2. The Fed keeps pumping trillions into the markets at an unprecedented level

3. The 2 trillion dollar stimulus bill

4. Market manipulation by hedge fund managers working in cohesion with Trump and his friends.

MustacheAndaHalf

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Re: How do you explain the recent run up?
« Reply #4 on: March 26, 2020, 07:26:44 PM »
Markets react to new information discounted by uncertainty.

Only from my memory, I think news about the coronavirus relief bill (CARES Act) changed over the weekend.  I think that's when it became clear the amount was closer to $2 trillion.  If I remembered it accurately, that would mean Monday (March 20) was the first chance to reflect that information in the market, less the uncertainty of Congress approving it.  On Monday the U.S. stock market went up +9%.

Last week, news articles criticised the U.S. for a lack of testing.  This week, the news agrees that technically U.S. testing has passed Korea, but has a larger population.  That is probably being digested by the media and markets.

That's why I was the first person to pick "The beginning of quick run back up, markets no longer spooked".  Including the words "keep the party going" after that creates a biased poll, since it sounds ignorant and none of the other choices include that type of language.  The poll would be more fair with those words removed.

American GenX

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Re: How do you explain the recent run up?
« Reply #5 on: March 26, 2020, 07:33:01 PM »
As is often the case, none of the answers apply.

The market (speaking S&P 500) will drop back down to new lows vs. the last week.  The worst is ahead of us.

CrankAddict

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Re: How do you explain the recent run up?
« Reply #6 on: March 26, 2020, 08:32:38 PM »
As is often the case, none of the answers apply.

The market (speaking S&P 500) will drop back down to new lows vs. the last week.  The worst is ahead of us.

Doesn't "A short term positive correction but more sub 20k days are definitely coming" cover that sentiment?

BicycleB

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Re: How do you explain the recent run up?
« Reply #7 on: March 26, 2020, 08:38:02 PM »
My WAG: investors were panicked that Trump and Congress would do nothing about markets and coronavirus, so doing something (progress on stimulus bill, a slight increase in "serious" Trump tone) was an improvement.
« Last Edit: March 26, 2020, 08:40:02 PM by BicycleB »

hodedofome

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Re: How do you explain the recent run up?
« Reply #8 on: March 26, 2020, 09:06:03 PM »
Itís a complete coincidence that the lows of 2018 was the bottom, if only a short term bottom.

ice_beard

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Re: How do you explain the recent run up?
« Reply #9 on: March 26, 2020, 09:40:36 PM »
People need something to cheer and somewhere to put their $$ besides questionable PM ETFs.  A lot of people will sell their cheaply bought shares, pocket some profits and the bottom will fall out of this suckas rally.  I won't be buying until well under prior lows.  How soon we get there is unknown but I'm willing to bet it won't take long.  Here's why...

Firms aren't even releasing Q1 numbers yet.  Some won't because they are so abysmal and honestly, difficult to even calculate because the global economy has essentially come to a stand still.  And then there will be Q2 results!!  And then the corporate debt bomb.  And then un-employment spiking to maybe 20%.  Not to mention hundreds of thousands of deaths.  Oh and oil at $15/barrel.  What a great time to be a masochist!! 

Jack0Life

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Re: How do you explain the recent run up?
« Reply #10 on: March 26, 2020, 11:01:50 PM »
I voted the "sub 20k".
Tuesday and Wed upticks were understandable.
Thur big jump was perplexing to me. I couldn't make sense of it. Unemployment was released. 280k vs 60k the week before. I though for sure the market was going to tank Thur.
I would really be surprised if it continue Friday.

vand

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Re: How do you explain the recent run up?
« Reply #11 on: March 27, 2020, 03:49:55 AM »
I don't see us going below the intraday low of Dow ~18,200 set on Monday, but a retest back to those sort of levels is certainly possible.

The markets are already pricing in an end to the first wave of the virus based on extrapolating the numbers from some of the earliest hit countries, and the current rally could have further legs in order to expunge a lot of the pessimism still around and get everyone reasonably bullish again.

However a climb back to the old peak is not going to be straightforward at all. All bear markets have some degree of duration about them before they fully recover all losses. The massive stimulus will not cover up the fact that real productive capacity has been lost. Buyback programmes will/have been suspended and will not be restarted for some time, and the economy will be burdened with more debt and higher social welfare costs. These will hamper growth for many years.

MaaS

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Re: How do you explain the recent run up?
« Reply #12 on: March 27, 2020, 08:47:15 AM »
This is probably a bull trap. I'd be surprised if we don't test the lows over the next month.

My logic against us returning to "normal" is beyond the stimulus, all of the facts are bad. There's no evidence the virus is starting to slow and shutdowns will end anytime soon.

When we do slow it, the rally has a good chance of holding. No idea when that will be.

celerystalks

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Re: How do you explain the recent run up?
« Reply #13 on: March 27, 2020, 09:48:12 AM »
The market for stocks is the most liquid market so people sell for any number of reasons (need cash, better investment opportunities elsewhere, afraid the market is going to drop further). In two business days cash is settled in the account.  That being said, there there is only one reason to buy.