8:56:10 AM PDT - Monday, April 6th, 2020

False Bottom or Start of Something Big: On This Rally’s Stamina  

By Editor - Thu Mar 26, 3:24 pm

(Bloomberg) — In the stock market lately, only one thing is constant: speed.After falling into a bear market at the fastest rate ever, the S&P 500 just recorded its quickest three-day advance in nine decades. As absurd as it may seem, the Dow’s already started a fresh bull market — up more than 20% from the lows — after more than $2 trillion in value was created in three days.Is it a bear-market bounce or something more sustainable? Nobody could possibly know for sure. While stocks had surely priced in a huge amount of pain, nothing compares with the coronavirus in terms of shock to the economy. Using history as an imperfect guide, there’s reason to be skeptical — it’s taken stocks an average of 18 months to start to recover after first signs of an economic contraction. But with trillions of dollars of stimulus landing, the case for bottom feeding also exists.It can’t be stated enough: no precedent exists for the current situation, in which a viral outbreak is killing thousands, has shut down economies and forced people to stay in their homes. This week, the amount of people filing for unemployment insurance more than quadrupled the previous record

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False Bottom or Start of Something Big: On This Rally’s Stamina

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