So far, this trading week has helped refine a point in longer-term market activity: the dips we saw at peak-pandemic close to a year ago were all temporary. The “crisis” the markets felt during the U.S.-China trade dispute (I put “crisis” in quotes because it is well out of the same league as the Covid-19 reality) were another mere blip on the screen. We’ve been in an overall robust — and supportable: just look at the better-than-expected Q4 earnings numbers — bull market for, literally, years now. It’s a good thing.
Of course, weeks like last week show that there can be plenty of turbulence where lots of pressure is applied — short-squeezing hedge funds betting against more than 100% of companies like
GameStop
GME
and
AMC
AMC
— so market activity would do well to proceed with caution, even with such a rosy outlook overall. Especially at current levels, which are at yet brand-new all-time highs as of last night’s close.
Even though markets are selling off slightly going into this morning’s opening bell, we’re not seeing any outward influence that may cast a dark cloud anywhere in particular. Even the short-selling, while still ongoing, doesn’t look to be something too dangerous for a wide array of investors at present. Q4 earnings season cools down this week, though we get
Twitter
TWTR
today after market close, and there are no big economic reports like we saw with new jobs numbers last week.
If the market is currently awash in too much cash sloshing around without a particular place to go — which may explain the short-squeezing purge, SPACS, as well as
Tesla
TSLA
putting $1.5 billion into Bitcoin yesterday — then a bit of booking of profits may well be what explains this morning’s down open. But with a major stimulus package coming in the next few weeks, it’s tough to see where a particular market slide might occur. That said, likely these near-record highs reflects a pricing-in of this stimulus to a good extent.
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