What the market does matter much more than what you think?: Don't scratch your head when the market rallies on Bad News
The Market is the sum total of the wisdom and the ignorance of all those who deal with it and it's formed by their actions. There is so much of buying interest in Bull market, that whenever the market is hit by bad news, "buy the dip" crowd use that opportunity to buy and make it Good news for everybody.
How does this play out?
Sample this: This is what Citigroup says
It's fascinating because Emerging market is trying to knock a very significant resistance that has stood there since 2012
S&P500: Buy the Bad News has worked since index broke out in 2012
This script has played out so well in last 20 months. Every bad news like Global market sell of in Jan-Feb 2016, BREXIT and Trump Victory all have turned out to be an excellent buying opportunity. The big question: Will it be the same with North Korea missile test news. Only time will tell.
S&P500 bottom was there for everyone to see during Jan 2016. I covered it back then
When markets hold important level even during times of panic - then it does send a message that BUY THE DIP crowd is still active and all is not lost.Read the complete article
I was dead wrong while Brexit. I thought this is it. DeGlobalization will tear the rally
George Soros doubles his bet against S&P500, turns bullish on Gold. This now looks like the most over hyped and crowded trade
— Deepak Singh (@smarket) May 17, 2016
but Nope....Bull market swallows bad news in no time and does not give a damn to anybody's opinion. It will do what it has to do. The same script repeated itself during Trump victory. You can go wrong in assessing what market will do on any news but never stay wrong else market can kill you. Fighting with the market never helps and after a while - this is what your thought process becomes
All Good things come to an end some day but you never know when. Fighting the trend never helps.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers