With the US economy mostly shutdown and no certainty as to when it may begin to reopen, the indexes have displayed the power of the Fed and its multi-trillion dollar operations. The Dow has retraced 50% of the selloff while the AMZN led QQQ has recovered more than 60% off the March lows. The question now is, can this remarkable rally hold-up as we begin earnings and see the full impacts of the virus in the economic data? After such a strong rally, a pullback or a lengthier consolidation would not be out of the question. Be careful, the fear of missing out is a strong emotion that causes traders to chase and over-trade extended rallies.
Asian markets closed modestly lower across the board after the IMF warns a severe global recession on the horizon. European markets are pulling back this morning as they weight the massive economic impacts after the IMF warning. US Futures point to a substantial overnight reversal ahead of big bank earnings and several economic reports that may prove to be market-moving.
Trade Wisely,
Doug
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