The Stock Market’s Poised for Another Leg Up, and If You’re Not on Board, You’ll Be Left Behind
The stock market’s risen like a bat out of hell since bottoming out on March 23, 2020.
Remarkably, the institutional benchmark S&P 500 is up 43% after being hit by the coronavirus pandemic.
And while there’s still no vaccine for Covid-19, as the country sees dangerous spikes across 32 states, with mayors and governors again calling for businesses to shut down, as the additional $600 per week unemployed workers were getting runs out, the stock market looks clearly poised to go higher.
Thank You, Federal Reserve
First of all, the market’s where its at thanks to the Federal Reserve.
Unprecedented action by the Fed, including setting up “programs” to buy corporate bonds, including junk bonds, and ETFs (Exchange Traded Funds), and massive liquidity injections anywhere and everywhere they were needed or not, to say nothing of financing the Treasury’s multi-trillion dollar deficit spending on all things pandemic related, was a clarion “risk on” call to stock market speculators, traders and investors.
Tens of billions of dollars flowing into newly opened “retail” brokerage accounts at Robinhood, Schwab, E*Trade, and everywhere else offering commission-free trading and fractional shares, helped start and power the run higher off the markets’ March lows, just as the Fed rang the “come and get it” bell.
Along the way, naysayers shorted stocks believing the rally was a “hoax” or maybe “fake news.” They provided constantly recurring buying power as they had to cover and keep covering their short bets by buying shares, they’d bet the wrong way on at higher and higher prices.
Meantime, institutional types caught flatfooted when Fed’s all-you-can-eat sign got lit up, had to chase rising stocks higher, buying them at higher and higher prices, to catch up with performance metrics they kept falling behind.
That’s how we got to where we’re at.
The “Leg Up” We’ve Needed Since the Rally Began
Now, despite all the hurdles still out there, mostly the same ones that have been run over and over again and again, the S&P 500 is facing down its June 8, 2020 highs.
Forget about everything else, on “technical” and practical grounds, if the S&P 500 can get to and then above its June 3,3232.39 highwater mark, stocks are likely going to “leg up” some more, maybe to all-time highs.
Every time the S&P 500 has eclipsed technical levels that could have brought in sellers, or at least seen heavy profit-taking, it marched higher without even taking a breath.
Once the S&P got above its 20-day moving average, there was no looking back. When it got above its 50-day moving average, it rode it higher like a surfer rides a giant wave’s energy. When the S&P got above its 200-day moving average in late May, it marched right on up to its June highs.
The only worry market participants had was what happened after June 8. Stocks seemed to tire and fell back looking for a resting spot, a place to “consolidate” and a chance to make another run higher.
Then, four trading sessions ago, the magic “golden cross” happened, that’s when the S&P500’s 50-day moving average crossed above its 200-day moving average. A golden cross is a tried and true bullish signal and this time was no different.
All that’s left now is for the S&P 500 to eclipse its June 8, 2020 highs and investors, especially those still lagging institutional types, will jump in and along with them will come sidelined money that’s been waiting for confirmation after confirmation that this rally is real, and we’re legging up.
That’s what’s ahead of us, as in imminently ahead of us, based on the early action this morning.
Speculators and investors would do well to buy some stocks here and ride markets higher, maybe to new all-time highs.
But, note to self, as clear as the path looks right now, those hurdles are still out there and so is the bogeyman.
How to Protect Yourself
In the past five months, we’ve seen monumental changes in just about everything. How we work, how we shop, how we learn, even how we date – it’s all changing.
Even though the markets are pushing higher, I believe the worst has yet to come. Our financial future, as individuals and as a country, could be at stake.
There are certain precautions we must take to continue to move forward with our economic growth. As the markets continue to take that leg up, we must protect ourselves against a potential crash.
It may be a distant glimmer now – the thought of a market collapse – but if the coronavirus continues the way it’s been going, especially here in the United States, then its better to be prepared…
I’ve worked closely with my publisher and we’ve put together a presentation you need to see…
Consider it your crash course to pandemic protection, and the financial strain it brings with it.
Click here to check it out.