Bull Trap or restarting a Bull run?

[tdv2]

Sure would be nice to know where things are headed.....but I know it's not knowable. Some of the bounce is surely due to longer term money rotating back in to equities....pension fund re-balancing and the like. From what I am reading it seems that many are reducing equity allocation, or have a plan to. I believe that's a normal path to be on, like a life cycle fund....preserve capital as we get older. Especially since many of us are FIRE'd already and should have a plan that keeps us from having to go live under a bridge if equities fall some stupid amount and stay there for a long time.

Having a plan and working it got me to where I am now (30+ years of accumulating). It's not easy, but I'm doing my best to stick to my plan. I just can't see how changing it drastically is the right move based on this crisis. I know...this time is different.

[foxfirev5]

I fail to see how printing more money with a greatly diminished GDP can result in a real bull run. Meanwhile I'll revisit the issue if/when VTI is below $100.

[Badger]

It ain't over and the fat lady hasn't sung yet. She is self quarantined and waiting for WHO to call "all clear". That will take a while. The effect on world economy will bounce around as knee jerk responses will keep things unbalanced. Time to hunker down.


Cheers!

[pb4uski]

Quote:

Originally Posted by foxfirev5 I fail to see how printing more money with a greatly diminished GDP can result in a real bull run. ...

That was one of my concerns even before COVID-19 crisis. Over the last 40 years it seems that the stock market in increasingly disconnected from the economy with program trading, artifically low interest rates by the Fed propping up the markets, etc.

[dixonge]

The market is fluctuating during a period of great volatility.

That's all that can be said or inferred, really.

[donheff]

Bear trap. I've resigned myself to a massive dislocation lasting years. More depression than recession. Too many sectors not likely to bounce back anytime soon. I hope I am way off. And, if it is as bad as it seems, I hope Congress has the fortitude to keep pumping individual and business relief (tied to maintaining payrolls) into the economy. Time to test the limits of Modern Monetary Theory.

[Tiger8693]

Quote:

Originally Posted by dixonge The market is fluctuating during a period of great volatility. That's all that can be said or inferred, really.

+1

I think that the market may have done correction based on the predictions of "hundreds of thousands of deaths" in teh US from COVID 19, so deaths in the single digit thousands will be a major relief and could drive things up.

For China, suppliers are shipping, and the product (manufactured assembly) we provide to China, they are asking us to increase our shipments by 20%.

[eytonxav]

For me no point in predicting, because what ever I pick it will do the opposite.

[Toocold]

I think -35% was the bottom of the dip, as most of the uncertainty is gone and new news that truly impact the market will generally be more favorable (ie. less negative) than what is already priced in.

I think it will zig and zag with a general upward trend.

[pb4uski]

Quote:

Originally Posted by donheff Bear trap. I've resigned myself to a massive dislocation lasting years. More depression than recession. Too many sectors not likely to bounce back anytime soon. I hope I am way off. And, if it is as bad as it seems, I hope Congress has the fortitude to keep pumping individual and business relief (tied to maintaining payrolls) into the economy. Time to test the limits of Modern Monetary Theory.

I hope you are way off too.

I'm not quite as pessimistic, but I do think it is highly likely that we will have a deep and long recession... as bad as 2008 but not near as bad as the Great Depression.

[jollystomper]

I am taking the long view, so while the past three days were good I am on Admiral Ackbar's side on this:

https://www.youtube.com/watch?v=4F4qzPbcFiA

[cyber888]

Quote:

Originally Posted by jim584672 As others have noted, a bull trap is when a market is going down, blips up, brings bulls in, then traps them and heads lower.

Yep, I was referring to the 3-day bull rally .. when I mentioned the bull trap

[brewer12345]

The GS economic forecast is a -24% YoY print for US GDP in the second quarter. At the moment they have a rosy outlook for the third and fourth quarter, but a huge rebound in Q3 seems quite unlikely to me. This bump looked a lot like a bear market rally and I was getting ready to short S&P500 if it got up to 2700 on the bounce.

[foxfirev5]

And what about inflation? Too much money chasing too few goods? Lower GDP and more $ in circulation?
Now I'm hearing that they're preparing another round 3 months from now, if needed. Like it won't be needed?
Now we'll have people that will be getting a raise by not working at all. What is next?

[Fermion]

Quote:

Originally Posted by foxfirev5 What is next?

UBI baby!

[Dtail]

Quote:

Originally Posted by Fermion UBI baby!

My son has been talking about this concept for years.

[pb4uski]

Quote:

Originally Posted by Dtail My son has been talking about this concept for years.

We never should have paid those kids an allowance.

[donheff]

Quote:

Originally Posted by foxfirev5 And what about inflation? Too much money chasing too few goods? Lower GDP and more $ in circulation? Now I'm hearing that they're preparing another round 3 months from now, if needed. Like it won't be needed? Now we'll have people that will be getting a raise by not working at all. What is next?

We haven't had an inflation problem thru massive war spending, recession spending, and trillion dollar tax cuts. This infusion of debt spending may test the limits. The MMF crowd has been saying you can keep printing money until you can't. Seems better to risk a round of inflation than unemploy a third of the country with no relief.

[foxfirev5]

Quote:

Originally Posted by donheff We haven't had an inflation problem thru massive war spending, recession spending, and trillion dollar tax cuts. This infusion of debt spending may test the limits. The MMF crowd has been saying you can keep printing money until you can't. Seems better to risk a round of inflation than unemploy a third of the country with no relief.

What about a situation like today where Nothing is being produced? Maybe it is different this time.

[BeachOrCity]

bull trap. Down about 2%+ at end of day here.

Heard a talk by Ethan Penner (CMBS guy...kind of a charlatan).... Anyway, he made a compelling case that the US is headed to Japan like situation...where the FED / Gov't basically are funding the economy.

Very bullish on certain types of commercial real estate.