Stocks Only Care About One Thing Right Now Dear Money & Crisis Reader, The market continues to climb a wall of worry. Stocks rose again yesterday despite widespread riots and violence in the US. I think this is ridiculous, but as I keep telling my clients, “It’s not what we think, but what the market thinks that matters.” And the markets think stocks are going HIGHER. Indeed, the internals are VERY strong despite all of the negative headlines. Breadth typically leads stocks. And right now, it’s leading them higher. The chart below proves this. Breadth (dark blue line) suggests the next leg up is here now. By the look of things, stocks could hit 3,100 on the S&P 500 this week. The same is true for high yield credit. Here again, we see a market leader telling us that stocks should move higher shortly. In simple terms, the market is telling us that it doesn’t care about riots, unemployment, or any of the other horrific headlines today. So what does it care about? Fed liquidity. |
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