I refer to just a handful of fundamental issues for both the bulls and the bears. In recent times various forms of 'stimulus' has kept this market afloat. Then in the last 2 weeks, hope and greed surrounding the Consolidated Appropriations Bill 2021, gave some life but in the market.
This evening (2020-20-23), there is nervousness because the Bill was referred to by POTUS as "a disgrace". That is a real cause for nervousness because POTUS has snookered himself i.e. if he doesn't veto the Bill. This is a matter of law and politics but entirely relevant to market . I take no sides. All I know is that there is money to be made (and lost), wherever there is .
But anything is possible, they say in these markets.
It's probable that price can move up as well as it can correct down. The main job of a trader is not be to right, but to limit how wrong s/he might be with controlled affordable losses. The other nice part of the job is letting winning positions run when the market is in his/her favour.
It's so simple - but NOT easy, obviously. 😄
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That means there is trouble in the system for Americans. The currently agreed sum is $600 per person. It does not say per person per week or month. It seems to be a one off payment. This is on a sliding scale and an annual normal earning up to $75,000/annum. A married couple with 2 child dependents will get $2,400 maximum. I honestly can't see this as a significant sum of money.
This is a good article with a calculator https://www.cnet.com/personal-finance/5-...
Anyways POTUS has dug in so it seems like no go, unless Congress can move quickly enough to override POTUS.
The Bill was important in lots of other areas. The markets were gagging for 'stimulus' at the close on Thursday. So I'm getting my popcorn ready to see how it goes at the next market opening.
Weekend Wall Street has been stuck at between 30201 and 30192 - that doesn't look good.
The market has charged north like no tomorrow. But be cautious in interpreting that as caused by the signing of the Bill. How?
It is known that speculators - alias gamblers with big dosh - throw money in the market in the 6 days post Xmas. They bet on what's known as the Santa Claus rally. It's been a consistent thing mostly for many years.
The big exception was 2008-2009. Well what we're experiencing in this pandemic puts anything of the recession of 2008-2009, in the dark. Furthermore, the market is filled with far more 'air' than back then.
The above statement is not one of hope for a crash. The probabilities are just not adding up to me, for a moonshot. But on the other hand the FED has far more ammunition in its store. So anything is possible.
And the 'gurus' are now working it out that that's likely to do very little. You don't need to be a guru to work that out. Plain old common sense could tell you that.
Enter new variants of the virus. I've seen no reports from the USA at this time of new variants over there. But I'll wager that they have landed - just being kept a closely guarded secret. Nope - I don't believe that they just 'don't know', or that the virus decided not to mutate in America.
Variants VUI-202012/01 and B117 lineage have been found in the UK. The latter is mostly responsible for the surge to 41,387 new infections today (2020-12-28).
UK variants have been picked up in about 12 countries at 26 December. That means the probability of spread has happened already.
The South African variant 501.V2 has gone on to become even more infectious.
P681H was identified in Nigeria.
WHO reported nine cases of a new variant detected in Denmark.
What that means is there is more trouble ahead. Fiscal stimulus has underestimated the financial impact of the viruses versatility. That doesn't mean the stock market is gonna crash. Oh no - the FED will fight to disallow that! Right? 😉😄