https://www.marketwatch.com/story/g...ays-the-bottom-is-in-2020-04-13?mod=home-page Today might be a good day to add to those positions who are in a bear camp. Like they know better.
The market will move in a way to frustrate the greatest number, as it usually does. Right now I sense bears are frustrated, pissed off having missed the first huge leg down, nursing losses from the last few weeks, ranting at the insanity of the Fed, either averaging down into this rise or itching to go all in as soon as they see a hint of downward momo. Bulls are confident but either not long or long only a small portion of the size they want, not wanting to chase the rally higher and waiting for a retest/dip or looking to buy in the May-July timeframe. This seems to be a recipe for choppy rangebound action, with downward spikes to shake out weak bulls and trap bears, but not offering a clear retest of the March lows - with risk to the upside, barring another unexpected black-swan shock.
A close friend of mine is a higher up for a very large, publicly traded bank. He and i talk once per month and says this downturn is in many ways worse than 2008. He is a manager that handles mortgages and derivatives and says they cant make any decisions regarding mortagage modifications or extensions for another 3 months because they dont know how bad things will get. His team think many business’ just arent coming back. What he says is just his opinion based on the latest facts as well as past downturns. He does not think this is a V shaped recovery.
If so, I wonder how this will translate into market action? Could well mean new all time highs this year.
if companies are going to be making less money their valuations will need to reflect that. currently, many tech companies are being valued as if there will be a strong V shaped recovery. if its not, the second wave of serious selling will begin. is today the start of that?
its not so much relevant to the FAANGs as AMZN, FB, and Netflix can increase their earnings through COVID. Same for MS and partially for Google. The only big tech comp that might really sell off is Apple, but given they are only valued 20 times their past earnings there is not much premium to sell.