COVID Range Bound Recovery

The S&P 500 has been faltering for the past three sessions and is back near mid-April levels.  For now it’s range bound between the upper 200 day moving average and the lower 50dma.  Flip a coin to determine if the market will breakout or breakdown from here. 

Here’s my assessment of the current situation:

 MEDIA NARRATIVE

  • Second Wave of outbreaks as economies reopen
  • Declining corporate earnings
  • Depression level unemployment
  • Food shortages

TRUMP

  • Points blame at China and increases rhetoric about tariffs, reparations, and economic de-linking.

INVESTOR SENTIMENT

  • Investors develop amnesia about recent Stimulus intervention and demand more SPENDING.

What I find interesting is that today’s levels are similar to the peaks seen in Jan 2018, Sep 2018 & Jun 2019.  Back then the FEAR was Trade War, Tariffs, Impeachment…ultimately none of that static mattered and the Market went on to set new record highs.

I remain cynically hopeful for another dip, to be used as a long term buying opportunity.

FYI- watch for the next episode of the Wealthsteading Podcast, #312 will be informative & FUN !!!

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