Things are somewhat looking up for the market today, with the Dow up over 5.5% at the moment.
After all of the doom and gloom over the last few weeks caused by the coronavirus outbreak, people are desperate for any good news, and investors are eager to find a floor to the market.
But it’s that bias that may be causing a Reality Gap between what people are hoping for in the market, and what is actually happening.
History can teach us a lot about how markets behave during similar crashes, and in today’s market update video, we’ll discuss what to expect. I’ll show you exactly why this data, in combination with the data about COVID-19 infections, should give us pause before declaring that we’ve hit bottom.
I’ll also be giving you my analysis on six different stocks – two which you should be avoiding like coronavirus, and four that are worth taking a look at right now.
Click below to watch…
Tuesday’s market open is giving hope that the market might be able to find a bottom. As I write this Tuesday morning, there are hopes that Congress can finally agree on a fiscal stimulus package that will help Main Street and not just big companies and Wall Street. And the White House is pushing for a quicker return to work for many Americans should progress on containing the spread of the coronavirus warrant it.
The big question I’m hearing, and have been hearing for weeks, is this – Are we at the bottom of this historic market drop?
The markets reaction to the stimulus bill still being negotiated in congress will tell us a lot about whether we’ve hit a short-term bottom. If the market acts like it has after Fed announcements – a quick move up followed by a reversal back down, then the chance for a short-term bottom is slight.
If, however, the market can hold the gains it makes on the announcement of the passing of the stimulus bill, there’s a strong probability that Monday’s low can the first near-term bottom that we’ve had in this epically fast market crash.
But what will tell us that the market is making an investable bottom – one that will hold for more than a week or two? For that, we know that the exponential spread of the virus itself is the primary problem. But with an estimated one billion people worldwide now under some sort of advisory to stay indoors and limit social interaction, fear and anxiety is taking a huge psychological toll on people.
The economic consequences of it all are clear to see. The Dow is down 35% for the year.
But have no doubt. We will get through this.
And on that last point especially, there are five clear signs I’m looking for to identify when the markets will bottom out…