They are confused. Can't tell whether DOW is back to bull market or not.

Next week they'll be fully on the bullmarket badwagon.



Marketwatch Article

Feels like a dead cat bounce to me.US Covid-19 case count is yet to peak and in the next few weeks the United States may get overwhelmed like Italy then the stock market may really sell off.

Part of the bullish move in US stocks is because of the Fed "buying" large cap stocks.Through their recently launched program Primary Dealer Credit Facility (PDCF) the Fed is taking the large cap US stocks as collateral for repo loans to wall street primary dealer banks and hedge funds.Considering these loans are being rolled over when they mature,the Fed is keeping these stocks on their balance sheet thus essentially buying these stocks.Much of the rally in Wall Street in recent days has been attributed to this Fed intervention in the stock market.There is talk that Fed should outright buy US stocks.Its a banana republic style intervention nonetheless equities are rising due to this

I cant trust the Chinese PMI number.Beijing is a serial liar and will go to any length to create an impression of a rebounded economy.Even though things in China arent as thick like in February,its not as rosy as they claim.

This week has lots of US data coming out like the private ADP payroll number to be released today,weekly unemployment claims figures tomorrow and the all important non farm payroll number on Friday.Weekly unemployment claims figure for last week was a record breaking 3.3 million people nearly 5 times as much as the worst record of nearly 700,000 during the GFC.Analysts expect and even worse number this Thursday.Fundamentally,potentially disastrous job numbers to be released in the next 3 days may precipitate a market sell off but if you have been in the Wall Street game long enough,markets could surge upwards in the hope that Fed may inject more liquidity to offset the carnage of job losses.That actually happened last Thursday where the dismal unemployment claims numbers jolted the stock market upwards in anticipation for more Fed easy money.I think we shall also be getting the US manufacturing and services PMI numbers this week

Also April marks the month where major S&P firms release their Q1 2020 earnings.It could be a nightmare though at least in January and early February companies were doing relatively ok.Q2 earnings are being projected to be a total disaster.Also some forecasts of economic contraction of upto 34% are being heralded by the Wall Street banks for Q2.Thats an even worse figure than in the depths of the late 1920s and 1930s Great Depression.



I expect a bumpy road ahead.Possibly more selling but with equally powerful rebounds as the Fed throws more trillions into salvaging a dire situation.

Some unbelievable numbers coming from Europe. Italy services PMI comes in at 17%(lower than Greece during its debt crisis), Eurozone area at 26% and US unemployment is already at 4.4% from a low of 3.5%. The economic savagery of this pandemic is brutal and extremely fast. Will Schengen agreement and the EU survive this crisis on top of the myriad of problems they've had in recent years?

DJIA. Wave (C) of [B] likely over at 24,011. A move below 22,000 will be confirmation of this. If so then expect DJIA to slide rapidly down toward 18,000. Alt. if DJIA rises above 24,000 then our initial upward target of 25,000 will be resistance from whence the index will fall.