The stock market is not a mirror image of the economy. So, please do not flash your low intellect by making statements like the stock market is disconnected from reality.
You have no idea then what the stock market does.
The stock market is a discounting engine. It looks at the current economic situation and then visualizes a new economic landscape and picks winners and losers. At this point in time, the only thing that matters - What the market believes the future will be. It's only belief
When the covid crisis started, the market quickly visualized that people will work from home and companies will under pressure to digitize to be in business and hence all those stocks rallied. The market started discounting accelerated Digitization growth. Was that disconnected
Apple, Microsoft, Amazon rallied but Google did not.
Why - because biggest advertisers on Google are travel portal companies and they pulled back on all advertizing. So Google still trades at $1 trillion while rest trade near 1.5 trillion dollar. Is this Disconnected from reality
The market quickly realized that the US Govt will pump in money in people's hands and that will drive up the consumption. So was market wrong in pricing up consumption plays
The sad part is that there are a large number of so-called intellectuals who have zero knowledge about how the market functions and they keep pushing the theory....oh the market is disconnected from the reality as if they only know the reality
As a price action reader....you have to watch price action to understand what the market is visualizing and trust me it makes so much sense. You can clearly see the new future the market believes in. Now there is no guarantee that whatever the market thinks will happen for sure.
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