Stocks: filling the gap or selling the news?
The market is oversold. The US government has gone wild with stimulus (irresponsible monetary policy + bold fiscal commitments).
While the news has just been confirmed, on the weekly there seems to be an upward momentum to fill the gap (as marked).
In the mid-term, however, the US economy will take a larger hit. While the stock market could remain detached, panic selling is likely.
The context of any market panic will be:
which means that the remaining moves are limited.
I wrote an article on the economic & social impacts of the pandemic: drjlt.com/post/137/the-death-of-a-paradigm-the-human-economic-and-long-term-social-costs-of-coronavirus
While the news has just been confirmed, on the weekly there seems to be an upward momentum to fill the gap (as marked).
In the mid-term, however, the US economy will take a larger hit. While the stock market could remain detached, panic selling is likely.
The context of any market panic will be:
- near zero interest rate
- trillions injected already
which means that the remaining moves are limited.
I wrote an article on the economic & social impacts of the pandemic: drjlt.com/post/137/the-death-of-a-paradigm-the-human-economic-and-long-term-social-costs-of-coronavirus
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