FULL DISCLAIMER, this isn't a prediction, merely a thought I wanted to share. From a fundamental standpoint, there's definitely an underlying bubble. Here's the question I've yet to hear asked or an answer to. If fundamentals don't matter in a bubble, why do we keep comparing p/e ratios...earnings....etc to not only 2000, but historically in general? If p/e ratios / fundamentals mattered, and there was this "invisible cap" then why does TSLA keep going higher....or ZM or TLRY and BYND over the past couple years?
---In bubbles, people buy the hype, they buy the everything is going to be great hype. Until everything isn't rosy. The one mistake I made prior to Q2 earnings was not realizing how big this $600 unemployment bonus was not only keeping the market afloat, but actually pouring more money into it. Millions of people working part time jobs who may of been making $100 to $400 a week were now making $650-850 a week. That's a lot of extra spending money to pour into the economy. Which hid the overall impact of the impact of job losses and the virus. Millions more working full time were now making more unemployment due to the bonus.
Now Trump has changed that $600 a week to $300. (400 technically, but 100 is supposed to be paid by the state, and most can't afford to do so, and will not be forced to). 14 million continuing jobless claims. That's roughly $4.2 billion dollars a week less being sent to and spent by consumers. That doesn't include those who don't even qualify for the $300 a week anymore under the new rules.
All of this didn't take affect until Q3 though, so the ultimate outcome from this wont be seen until Q3 earnings. Which is the reasoning for our chart projections.
1. If we want to compare 2000....2000 price action suggests there is plenty of upside room in the tank....the nasdaq was up nearly 350% in 17 months from late 98 lows.
2.There's nothing in the way besides an overheated market right now, which again, when parabolic, has no predictable end. Everyone thinks everything is rosy and going great. It'll take a plethora of shocking Q3 earnings misses to turn things sour. At that point, I would expect a pretty nasty correction.
3. The average returns over the past 3 months has been right around 8%. The next 7 weeks could higher, could be lower, but for the upward projection, the average has been used to come up with the above chart price target.
Again, just an idea, not a recommendation by any means! GLTA!
---In bubbles, people buy the hype, they buy the everything is going to be great hype. Until everything isn't rosy. The one mistake I made prior to Q2 earnings was not realizing how big this $600 unemployment bonus was not only keeping the market afloat, but actually pouring more money into it. Millions of people working part time jobs who may of been making $100 to $400 a week were now making $650-850 a week. That's a lot of extra spending money to pour into the economy. Which hid the overall impact of the impact of job losses and the virus. Millions more working full time were now making more unemployment due to the bonus.
Now Trump has changed that $600 a week to $300. (400 technically, but 100 is supposed to be paid by the state, and most can't afford to do so, and will not be forced to). 14 million continuing jobless claims. That's roughly $4.2 billion dollars a week less being sent to and spent by consumers. That doesn't include those who don't even qualify for the $300 a week anymore under the new rules.
All of this didn't take affect until Q3 though, so the ultimate outcome from this wont be seen until Q3 earnings. Which is the reasoning for our chart projections.
1. If we want to compare 2000....2000 price action suggests there is plenty of upside room in the tank....the nasdaq was up nearly 350% in 17 months from late 98 lows.
2.There's nothing in the way besides an overheated market right now, which again, when parabolic, has no predictable end. Everyone thinks everything is rosy and going great. It'll take a plethora of shocking Q3 earnings misses to turn things sour. At that point, I would expect a pretty nasty correction.
3. The average returns over the past 3 months has been right around 8%. The next 7 weeks could higher, could be lower, but for the upward projection, the average has been used to come up with the above chart price target.
Again, just an idea, not a recommendation by any means! GLTA!