Hope and greed are also made of thin air!
Updated
A healthy economy - which is not 'the stock market' - needs solid foundation. Some believe that the stock market 'is' the economy. Some are definitely wrong! Sentiment is what the markets are about - this is not about reality.
The DJI has now been reinflated but with what?
1 - cheap printed money
2 - loads of hope and greed.
3 - implicit guarantees.
The market is still overvalued by about 15 times its fundamental value.
Tonight - the seemingly impossible happened. The market charged north zillions of points up to near 26900. It was already pretty hot for the north all day. Then when you thought there might me a minor correction south, it busted north again! No time to catch breath. By the time anybody reads this price may have shot past 27000. The alternate ABCD pattern is not predictive of anything. I use these as guides.
So what drove the last pump north between 23:00 and 23:45 GMT? I don't know for sure, but it seems that promise of some vaccine that boosts antibodies was responsible (I may be wrong).
But look at it carefully, and you don't need to be an immunologist. All you need is Google. There are other conventional treatments that can boost antibody production in the body (and I'm not going to lecture on this). Well, the folk who are pumping north are for sure not doctors or immunologists. So, they jump on any ray of hope as they would see it. This happened the other day with promise of another vaccine.
In addition there is the earnings season upon us, and the 'fat' with FED cheap money have been given the 'implicit guarantee'. Basically they can't lose. They have money to burn and you do not!
Fundamentals will always catch up. It's reality. I see myself as a realist. I'm not one for taking risks chasing the DJI north. For sure the market has left me behind. But I'm not bitter at all. Gamblers may rejoice now.
The problems arising from COVID-19 for economies are not going to be cured by a vaccine. There are a whole load of mathematical reasons for that.
The bullish punters are oblivious - in the biggest casino on earth - as to the deep-rooted problems of demand-supply shock that will not resolved soon if an effective vaccine was found this morning.
The world has been having a big party for the last 11 years. Most economies are actually built on productivity demanded by leisure, travel and entertainment industries. Think about it. Even real estate values are magnified by earnings from those industries.
Nobody has an answer to how a vaccine will cure all that has been severely damaged. Nobody may care now. But they will care when the bubble pops a second time.
This market is setting up like bad weather. And you don't know when the 'downpour' will come.
Disclaimers: This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
The DJI has now been reinflated but with what?
1 - cheap printed money
2 - loads of hope and greed.
3 - implicit guarantees.
The market is still overvalued by about 15 times its fundamental value.
Tonight - the seemingly impossible happened. The market charged north zillions of points up to near 26900. It was already pretty hot for the north all day. Then when you thought there might me a minor correction south, it busted north again! No time to catch breath. By the time anybody reads this price may have shot past 27000. The alternate ABCD pattern is not predictive of anything. I use these as guides.
So what drove the last pump north between 23:00 and 23:45 GMT? I don't know for sure, but it seems that promise of some vaccine that boosts antibodies was responsible (I may be wrong).
But look at it carefully, and you don't need to be an immunologist. All you need is Google. There are other conventional treatments that can boost antibody production in the body (and I'm not going to lecture on this). Well, the folk who are pumping north are for sure not doctors or immunologists. So, they jump on any ray of hope as they would see it. This happened the other day with promise of another vaccine.
In addition there is the earnings season upon us, and the 'fat' with FED cheap money have been given the 'implicit guarantee'. Basically they can't lose. They have money to burn and you do not!
Fundamentals will always catch up. It's reality. I see myself as a realist. I'm not one for taking risks chasing the DJI north. For sure the market has left me behind. But I'm not bitter at all. Gamblers may rejoice now.
The problems arising from COVID-19 for economies are not going to be cured by a vaccine. There are a whole load of mathematical reasons for that.
The bullish punters are oblivious - in the biggest casino on earth - as to the deep-rooted problems of demand-supply shock that will not resolved soon if an effective vaccine was found this morning.
The world has been having a big party for the last 11 years. Most economies are actually built on productivity demanded by leisure, travel and entertainment industries. Think about it. Even real estate values are magnified by earnings from those industries.
Nobody has an answer to how a vaccine will cure all that has been severely damaged. Nobody may care now. But they will care when the bubble pops a second time.
This market is setting up like bad weather. And you don't know when the 'downpour' will come.
Disclaimers: This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
Note
Yep - it was word of a 'promising vaccine' that caused the DJI to make a push of some 300 pts yesterday. Share price in Moderna took a 25% step north. But the whole of the DJI took an additional leap for joy. But get this - the vaccine still very much in the trial phase - has not been proved as yet as effective against COVID-19. Production of neutralising antibodies does not mean that the vaccine will be effective. The way the markets worked this is to say, "Of course - it means something great.. let's get in before everybody else." This is not about recognised fundamental value. It's about hopes and greed for fundamental value.
So FOMO among the rich and powerful is also driving the markets to ridiculous levels. Yes - the whole world - not just the DJI. The AUS200 and the DAX also followed.
Note
Goldman Sachs revenues from stock trading was up 93%. Some were surprised - and the markets around the world stupidly leaped for joy. Well Goldman was/is one of the FED's friends. Loads of the FED's friends tanked up on money made out of thin air. This won't go on forever. Watch Gold
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus youtu.be/NjTdvALChwk ]
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