@DearMrPres2020 There are several reasons. the market is forward looking so when it crashed back in Feb/Mar it was looking forward to what the virus could do to the economy.
The market day to day is based on emotion. Back in Feb/Mar the emotion was fear and panic
Longer term the market..
The market day to day is based on emotion. Back in Feb/Mar the emotion was fear and panic
Longer term the market..
@DearMrPres2020 ...is based on fundamentals. In Apr and May once the panic and fear receded the fundamentals come into the equation the forward looking became what happens after virus leaves.
then there is the FED and the money being pumped into the economy. To inflate during a deflationary..
then there is the FED and the money being pumped into the economy. To inflate during a deflationary..
@DearMrPres2020 ....event which is what the lockdowns were... The FED put a floor under the market and economy allowing that emotion of panic and fear to lessen and change to one of what comes next...
The market also tends to react opposite of what everyone thinks..so everyone was betting on a.
The market also tends to react opposite of what everyone thinks..so everyone was betting on a.
@DearMrPres2020 ...fall in the market (they went "short") and you got an opportunity for a short squeeze to occur which is IMo what we have been seeing for the last week or so
@DearMrPres2020 For someone new to all of this ignore it might be easier to think of the stock market as your avg store during Christmas season. The best buys are way before Christmas on black friday when people know Christmas is coming and right after Christmas when stores try to offload
@DearMrPres2020 inventory....If you wait and do the shopping right before Christmas the sales are few unless the shopping season was bad for the store. Same for the stock market, stocks are cheaper way before and right after an event and more expensive during the run up and during the event.
@DearMrPres2020 all things being equal. If the event is better or worse than expect stocks will become more expensive or cheaper depending on which. To wrap this up. Stock price is based on emotions,. timing and fundamentals. When all three align you get major moves in price.
@DearMrPres2020 when one or two are signalling different then the others you have swings in price or a trading range.
@DearMrPres2020 hope that helps.
