Silly

John Cleese silly walk

John Cleese’s silly walk, Monty Python’s Flying Circus, 1970, h/t arstechnica.com

In the stock market, earnings season is known as “silly season.”  This week, a new silly season kicked off and it may very well mark a return of volatility to trip up complacent market participants.

As the catastrophic effects of the global Covid-19 pandemic bash corporate earnings, investors will be adjusting their once-lofty expectations. 

Throughout market history, a shakeout and break has been the catalyst for getting investors to examine earnings in their proper light.

We’ve seen the market move violently from fear to FOMO (fear of missing out).  I suspect we will witness another bout of fear before this chapter is through.

There’s a tremendous struggle going on between inflationary and deflationary forces.

I think it’s silly to try and know what the market will do.  Instead, our technical analysis focuses on what the character of the behavior of market price movement is saying.

In our 31 years of publication, we’ve built upon a knowledge based on experience. Subscribe to Options Hotline today to stay a step ahead of the crowd.

Stay safe and be well.

Best regards and in good humor,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

river flow

h/t phys.org

“When it comes to the overall stock market, there are only 2 fundamentals that matter.  Forget book value, div. yield, PEG, etc.  The 2 factors that matter are:

1. How much money is there?

2. How much does that money want to be invested?”

–Tom McClellan, @McClellanOsc

Central banks have been vigorously pumping up their balance sheets, with liquidity flowing into stocks.  We shall see what happens when the flow slows and the river begins to dry.