stock rally for real

[LivingAlmostLarge]

I still haven't sunk more money in than what DH is doing in his 401k (we're doing pre and after tax maximum). Anyway I didn't have time until this week to look at the market really. I am wondering after seeing this 4000 point rally on the Dow Jones is this real? Do you think we've hit rock bottom and are on our way up? Or do you think that we are dead cat bouncing and heading back down?

I'm feeling dead cat bounce. I'd love to be proven wrong, But I haven't even tax loss harvested yet. I am hesitating to do anything. Isn't that what they say, when you are are fearful with stocks do nothing? I am indecisive right now. I don't know which way to turn for once and I actually might be able to capitalize on the market this time.

Where do you think we are in the market?

[disneysteve]

Obviously nobody knows for sure (or we'd all be wealthy). I think it's pretty clear that we haven't seen the long term economic impact of this yet. Wait until 1st quarter earnings start coming out in a few weeks. I'm sure a lot of that is already priced into the market but if the numbers are way lower than forecast, that could tank the market.

A ramp up in bankruptcy filings, both business and personal, is likely on the horizon and that will affect things too.

A sustained increase in the unemployment rate, a flood of business closures, ongoing trouble controlling the COVID-19 epidemic, deaths of prominent people like world leaders, and much more can and will all affect things.

My guess? It's a bounce and will go back down. We're not done.

[cypher1]

I'm with DS that the market will continue to up and then back down further for the next coming months; depending on lengths of shutdown, unemployment numbers, and rates of contagion growing. I was telling my roommate I believe we'll be seeing more buying opportunities to come.

[rennigade]

When you know the bottom was reached, it'll be too late. You'll have missed that ship. No one knows for sure.

If you'd like, I can let you know when I place an order. On those days, the market seems to go up. After the order executes, the market will be down the following day. I swear im the kiss of death.

But in all seriousness...like everyone else is saying, the road ahead is going to be bumpy for a while.

I still think one of the worst things you can do is sit on the sidelines and analyse everything. Paralysis by analysis. Stick with DCA...buy on the way down, buy on the way up.

[bjl584]

Look for extreme volatility until the virus peaks and new cases start to fall.

[kork13]

I agree that it's likely a bounce...albeit a very strong one, and it probably has some legs for at least a week or two. If there's anyone still afraid by what's happening, this is likely the time to get out of the market. As DS & cypher said, I fully expect that we'll maintain this "less bad" level for a little while, until more complete/reliable data comes out, and as we see exactly how badly businesses (particularly small-mid sized businesses) are able to survive (or not). Once we have more fidelity on exactly how bad this is for businesses, I expect it'll drop back down again, at least another 15%-20% down from where it is right now (think S&P 500 at 2000-2200).

I think the market is somwhat oversold for current conditions based on the hysteria/panic. However, if/when companies do actually file bankruptcy and/or close down completely, significantly lower valuations across the market as a whole will be valid & warranted, just depending on exactly HOW bad it gets. Specific companies will still be & do just fine, but all stocks will be sold off out of continued panic. Which means that as this all continues, there will remain a large number of strong companies that are simply oversold with their peers, giving all of us as investors great opportunities to pick up bargains.

Regardless of all that, the markets will be extremely volatile, probably for at least 3-6 months.

[disneysteve]

Which means that as this all continues, there will remain a large number of strong companies that are simply oversold with their peers, giving all of us as investors great opportunities to pick up bargains.

Let's hope so.

[LivingAlmostLarge]

rennigade I will happy hear when you invest. I understand DCA but I'm already DCA around $4500/month. The question now rises how and when to put more in. I'm feeling burned right now and perhaps I should have invested when it hit 18000 DOW. But now? I am paralyzed.

[cypher1]

rennigade I will happy hear when you invest. I understand DCA but I'm already DCA around $4500/month. The question now rises how and when to put more in. I'm feeling burned right now and perhaps I should have invested when it hit 18000 DOW. But now? I am paralyzed.

If you think its going to drop soon (you're not alone), wait it out a little longer. It's just a matter of when and how comfortable you are to jump in.

[Scallywag]

I think market volatility will continue at least until the end of Summer. I think we're already in a recession and this will likely get worse before it gets better. My nest egg size is smaller than most people's so I need to be really careful. If I absolutely HAD to invest now, I'd stick to high quality, profitable blue chips only. That's JMO.

[~bs]

dead cat bounce is my uneducated guess. The money pumped in will help, as it did with the 2009 financial crisis, but it wont be enough on its own.

Honestly, if anyone wants to get out, now is the time to do it probably with the stock market being around 15% down off the peaks. Remember it was lower than this point at the beginning of last year.

[Scallywag]

Yes! Now is likely the time to get out as the market assessess the true cost of the COVID 19 pandemic & the first rent / mortgage payments go missing. The longer we have the economy shut down the worse it is going to be. Even if the pandemic came into control ASAP, the MASSIVE disruption caused to global supply chains will cause a contraction in global GDPs.

More than investments. I am worried that we'll go into deep recession that takes decades to overcome.

[rennigade]

rennigade I will happy hear when you invest. I understand DCA but I'm already DCA around $4500/month. The question now rises how and when to put more in. I'm feeling burned right now and perhaps I should have invested when it hit 18000 DOW. But now? I am paralyzed.

Well, I did buy 80 shares yesterday at $12.80. I see pre market its already down to $11.51, lol. Seriously though...when I invest, the market almost always seems to drop for that particular day, or the next. This is yet another reason why when I invest, its almost always long term.

[LivingAlmostLarge]

okay i'm going to sit on april foools day and see where my money is. It's the first of the month and time to bite the bullet.