ut what may be the single most beneficial aspect of the recent Fed-fueled ramp which saw the central bank inject or backstop nearly $8 trillion (and counting), is that technical analysis has finally been thrown out of the window, and "by now, everyone’s aware there’s no moment of the past that can be used as a template to tell which way stocks will lurch next."
Just days before the March 23 bottom, Ramsey cautioned clients that it was “too early” to expect a major bear market trough, as a phase would come when stocks and economic data fell in tandem. A study by the firm showed that on average, over 11 past recessions, stocks didn’t start to recover until 1 1/2 years after the economy started contracting. Little did he know that on March 23 the Fed would toss all the playbooks, and go so far as to break the law by creating a SPV in collaboration with the Treasury that would allow it to buy corporate bonds... a similar approach that will soon give it the ability to buy stocks after the next crash.
It wasn't just Leuthold: Barclays strategists mapped out a scenario where an extended recession could lead to a 50% peak-to-trough selloff. The farthest the S&P 500 ever fell was 34%. Goldman was expecting a second wave of selling to push the S&P below 2,000. Northern Trust Wealth Management pointed out that it typically takes about 1 1/2 years to recover from a 20% drop. Instead, the S&P 500 rose 40% in 50 days, the fastest rebound in nine decades. Anyone who tried to use 2008 as a road-map was badly burned.
whoever still believe economy sharp recovery is also stupid.
Mathematically it doesn't work the same. Eg. lose of 50% in stock, you need 100% to make back similar level. Take GDP, sharp drop -4% this year, even a recover of 4% doesnt equal, and many doesn't understand this........
Paperplane stocks can't go down much more because there's no lack of capital. No margin calls after the march selloffs.
Now question is where are the capitals going :X
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Posted by paperplane > 2020-06-28 11:45 | Report Abuse
ut what may be the single most beneficial aspect of the recent Fed-fueled ramp which saw the central bank inject or backstop nearly $8 trillion (and counting), is that technical analysis has finally been thrown out of the window, and "by now, everyone’s aware there’s no moment of the past that can be used as a template to tell which way stocks will lurch next."