On a technical level: What I believe we are experiencing is a dead cat bounce. Market price action is showing signs of still being alive after a slaughter. In this case, Prices will tend to retract up 50-60% of the losses (for roughly 5-10 days) before continuing another drop. This leads a lot of ill advised traders and investors to get suckered by this move.
Albeit, I do believe it’s a good time to BUY investments that are for the long-term. Unfortunately there are only a hand full of long-term stocks that are offering value right now. Mainly Communication, Utility, and Real Estate stocks.
Fundamental: The Coronavirus is holding the smoking gun. The disease can have a damaging economic effect, but in my honest opinion I see it as an alibi... for now. Currently it’s pulling the curtains off some deep-rooted issues within our financial system. Specifically with the amount of excess cash flows within the global markets due to money printing. And secondly, the Federal reserve manipulating interest rates creating exorbitant price movements within the financial system with baseless data to support the actions.
The market is moving predominantly off news headlines and computer algorithms- this to me is a sure tell sign of late cyclical activity. As we see the built up pressure start to relieve I urge all to “bare steerageway.” 🙃
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