Hope indeed dies last. Last Friday I stumbled across some rather silly statistics which suggested that the double digit rally last week marked the early stages of a new bull market. Such cognitive dissonance may have been caused by acute mental delirium due to late stage COVID-19, but it’s most likely related to the anticipated congressional passage of a $2 trillion stimulus bill aimed at addressing an economy that effectively has come to a screeching halt.
It’s a complete mystery to me that some of the smartest people I know continuously have a hard time wrapping their mind around one of the simplest tenets of trading. Plus it’s one that spells double true when it comes to high volatility bear markets: Buy the rumor, sell the news. Of course in the case of bad economic news in the context of a bear market this rule should be inverted to ‘sell the rumor, buy the news’.
When my wife and I departed Valencia for our annual escape from Las Fallas on March 8th we left behind a hustling and bustling city in the midst of preparing for the biggest spring celebration of the year in Europe. What we returned to less than two weeks later was a desolate scene reminiscent of the Will Smith classic ‘I Am Legend’.
For the next three days I will still be pretty limited in my ability to properly follow the market all the way out here in the Spanish boonies. Internet access is acceptable at about 10Mb/sec but my MBP’s 15” Retina display – albeit crisp and more than appropriate for regular tasks – hampers my abilities to properly run through my extended list of charts and market scanners. Although I am really not looking forward to returning to Valencia during a nationwide quarantine I am eager to jump back into the action in full force. For there are real fortunes to be made in the days, weeks, and months ahead. And this is the moment when you should start paying very [...]