So if you have been trading lately I’m sure you have heard of ‘buying the dip’ or ‘Stonks only go up’... The FED has created a whole breed of investors that believe stocks only go up. The crazy part is they have been kind of right in the current environment. It’s kind of crazy bad news makes stocks go up and good news makes them go up even more!
So why is this happening? Well, it’s because the there is a stock safety net called the FED. They are buying assets and flooding the markets with liquidity that has undermined true capitalism. The most recent airline bail it talks is the best example. Why the airlines? Why not restaurants, hotels, or manufacturing? It’s because airlines have better lobbyists. So will buying the dip keep working. I believe it will until the FED backs off which is not in the picture.
We are in the upward channel which seems pretty crazy considering that Trump tweet sent us right to the bottom and now that we rallied back we are touching that upper line. TA tells me we are going to bounce off that upper line, but who knows in this market...
PM looks like we keep moving up. I’m about to throw in my bear towel at this point...
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I got into a playful argument with a co-worker the other day about political stuff and her response was look at how awesome the economy is doing, my 401K has never been better. It's hard to argue with people when they have something so personal at stake and all they can see is what is right in front of them. Thankfully I am a ways from retirement that I should be able to handle the impending crash, but her, I worry about.
Yeah I hate to time to market, but I think so long as the FED is in play we should only go up. For my 401K I rebalance twice a year and I'll put some protection on when I think things get too crazy aka cash.