Why I think we drop again on Monday or Tuesday....

D

derektrader

At least the nasdaq. I think the market not only dropped on president Trumps corona news but also the jobs report after looking deeper than just the headline numbers. I think the recovery is simply running out of steam. I still say we fall close to the 200 dma within the next 30-60 days.
The reason i say we fall again monday or tuesday is that the naz fell right to the 50 dma again. The more you touch support, the weaker that support becomes.
 
Don't concern yourselves about the ones who get their knickers twisted about giving an opinion. You said nothing about going short or long. Just what you think might happen.

IM(also)O I also believe Naz might continue most recent trend downward.
 
derektrader said:
I think the recovery is simply running out of steam.
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In other words, an irrational market running out of buyers. The economy was already fully recovered when Trump took office in 2017. But the market had not topped. Then the Fed wisely began to reduce inventory, which put, as intended, upward pressure on rates. This was followed by brow beating by our resident JACKASS, who happens to live off OPM and who therefore benefits immensely from a cheap dollar and inflation. The Brow beating resulted in a tempering of the Central Bank's plans and a "robust" market driven by incipient inflation. Then, ouch!, Covid hit (Trump's "China Virus"), and we were off to the races with record low interest rates and cheapest dollar. More inflation, and consequently higher highs followed. There would have been no more propitious script to serve the Jackass's interests than this, except for a little snafoo. Mr. Trump had to remain ensconced in the White House to avoid being ensconced in Prison for Tax and Bank Fraud.

And then it seems fate took a hand, exactly as it did for Humphrey Bogart in "Casablanca," with, it would seem, a somewhat different outcome; we still don't know who dies, and who will fly away with the beautiful woman.
 
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piezoe said:
The economy was already fully recovered when Trump took office in 2017. But the market had not topped.
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So the economy leads the stock market?
https://www.benzinga.com/general/ed...-stock-market-is-a-leading-economic-indicator
What Does It Mean That The Stock Market Is A Leading Economic Indicator?


Wayne Duggan , Benzinga Staff Writer
March 25, 2020 4:50pm 3 min read → Click here to get Benzinga's options trade ideas.[/paste:font]

The S&P 500 and the Dow Jones Industrial Average both traded higher for the second consecutive day on Wednesday. The indexes are now up about 11% and 15%, respectively, since Monday’s close, but some investors are confused about the trading action given the U.S. COVID-19 outbreak has worsened in the past two days.

The stock market is what’s known as a leading economic indicator. A leading economic indicator is a measure of economic recovery that shows improvement before the actual economy does.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

Options Trades For This Crazy Market
We sift through this volatile market for consistent trades so you don't have to. Get Benzinga Options: Starter Edition to follow Benzinga's high-conviction options trades. Click here to subscribe.

Stock prices are forward-looking in the sense that investors buy and sell stocks not based on what happened yesterday or what is happening today, but rather based on their expectations for the future. For example, a company may report impressive EPS and revenue numbers in a given quarter. But if they also cut revenue and EPS growth projections for the next several quarters at the same time, the stock will most certainly sell off.

An individual stock is priced in large part based on investors’ expectations of what is coming in the next several months and quarters. Collectively, the S&P 500 is priced in a similar fashion.

This Week’s Rally
Today, a large portion of the U.S. economy is shut down due to the COVID-19 outbreak. Although the number of U.S. cases continues to rise on a daily basis, there were at least two major pieces of news out so far this week that may have changed investors’ expectations for the future.

First, Congress is expected to pass an unprecedented $2 trillion stimulus package that eased fears over the near-term stability of the U.S. economy. Second, U.S. President Donald Trump said he is hoping to get the economy “rarin’ to go by Easter.” Trump’s timeline may not be realistic, but it indicates to investors that there's a light at the end of the tunnel.

The economy may not bottom for at least another month. However, because it's a leading economic indicator, the stock market will bottom as soon as investors begin to anticipate the economic bottom.

In that sense, the stock market may have already bottomed this week or it may find its bottom in the next week or two as long as investors continue to anticipate an economic recovery at some point in the relatively near future. If at any point it looks like the economic downturn will drag on longer than anticipated, this week’s rally could quickly fizzle and the stock market could once again hit new lows.

See Also: 7 ETFs To Buy In A Recession

Benzinga’s Take
There’s no question the economy and the stock market are closely linked, but investors shouldn’t make the mistake of thinking they're perfectly synchronized. The stock market is often one of the earliest signs of potential economic trouble ahead, and the market is also an early sign that there is a light at the end of the tunnel.
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As long as market drops less than 1% (even multiple ones of less than 1%), it will attract greedy buyers as considering that drop as buying opportunity. We need a 4% drop and then another 3% drop and then a flat day. That will scare the S@$T out of the buyers.
 
ph1l said:
So the economy leads the stock market?
https://www.benzinga.com/general/ed...-stock-market-is-a-leading-economic-indicator
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Yes, of course it can. Sometime the market leads, sometimes it lags. It doesn't always lead because it habitually becomes more irrational near the ends of economic cycles.. There is substantial market hysteresis. The current U.S. market is a wonderful example of the market lagging the real economy.

Once you recognize that markets are almost always irrational, i.e., too low or too high, you will understand that Markets are nothing like text book markets, which are supposed to rationally anticipate the future health of the economy. Understanding this will help you make money if you are an investor, but not so much if you are a trader. But even if you are a trader, it can help you avoid trouble. The best discussion of these phenomena is in Soros's writings, which see. Markets do sometimes correctly anticipate turning points, but they also sometimes incorrectly anticipate them. That's why there is risk. Many decisions aren't rationally based on accurate knowledge; they are based on emotional response to what has happened. Markets that are going up tend to be bought;markets that are going down tend to be sold. It's basically dog track mentality that rules in the short run, and in the long run we are all dead..

Ultimately, inflation will drive markets to higher and higher nominal peaks, while in nominal terms, GDP will grow as well and on top of that, for a large population, fully developed economy there will be some small, real growth in GDP, assuming population grows. Long range investors depend on this to keep them from losing to inflation and hope to exit when the market is irrationally high, which is most of the time. The economic cycle, and thus the market cycle, rides on top of this long range trend.
 
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S&P looks like it is in 5 day balance. Not really shaken too much by presidential COVID news or jobs report. Clearly above last week's range, never could break into it.

NQ.png


Nasdaq looks the weakest of the three, on the low end of last week's range, but still clearly above the prior week's range. Barely even tested the prior week's range in overnight session earlier in the week.

RTY.png


Russell looks the strongest of the 3. Clearly finishing on top of last week's range.

I think market will have a good start on Monday as it shrugs off the C19 "president is really sick and dying" fake news. Probably sideways until the election.
 
Two major components of market activity on Monday will be

1. Presidents Trump's health condition
2. Progress on stimulus talks

I speculate that Trump will be doing well. And that there will be talk about stimulus voting taking place sooner than later.

Given the above being positive, I anticipate respectable gains for all indexes for at least the first 2 hrs of trading on Monday.
 
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