Good morning. 2020 continues to be an unbelievable year. With the worst possible economic scenario playing out, the stock market continues to do what its done best the last 11+ years....
... dust itself off and defy gravity. If you had told anyone prior to 2020 that the entire global economy would shut down for the better part of two months and the Nasdaq would be trading up for the year.. you'd be put in a straight jacket.
2020 is the year the stock market bears got the best case scenario for their long awaited market crash. And sure we got the swiftest downside move in market history. But there wasn't a lot of time to celebrate. I'd imagine most of those bearish pundits were still calling for more downside at the lows... and just like every year since March 2009... they got exctly what they didn't think was coming. A massive recovery rally. One that has landed the Nasdaq GREEN for the year! Imagine that! The most dire economic event in our history... and the Nasdaq is green on the year.
While we were in the midst of the ugly decline in March the FED was quick to do what I thought it would do when the next recession came. Attack with more firepower than they did the last time. And oh boy did they ever. Zero percent interest rates, unlimted QE, Asset price protection programs with fancy four letter names. Junk bond buying, lending to almost everything and everyone. Everything under the sun save outright buying on the stock market... yes we will leave that for the machines.
So here we are... right now pre-market postive GILD headlines on possible treatment for the Virus has lifted the $SPY up to levels I have been pointing out as resistance. Right near $293.
This rally on hope now reaches the reality phase. We are slowly opening back up. What is the new reality?
And how will the market react to this new reality?
And probably even more importantly how will the Central Banks act going forward as the fire is still smoldering from this Virus induced economic disaster.
For now... and yes I pointed to $270 and then $290s as a landing zone.. we are running into resistance at $293 or so. The market is nearing that pre-market. We break that and the unthinkable happens. A move back over $SPY $300?