Bear market rally in action
We are living consecutive days of gains in the US indices without fundamental reasons. People are buying stocks just believing they are cheap, But are they really cheap? I’m not convinced at all. The big slowdown in housing, the falloff in retail sales and the vertical drop in the LEI (leading economic indicators) are already signalling a deep recession and more troubles for companies ahead.
The company’s fundamentals keep being under pressure and will continue to deteriorate as profit margins get squeezed from higher costs and the inability to pass those costs on through higher pricing. Everyday more companies cut its forecasts and sales. The longer employment numbers persist, the greater the danger that economic activity will contract even further. I suggest that we are under a bear market rally instead a new start of a bull market. The current rally is nothing more than a bear market rally and nothing more. The momentum behind it has been terrible, which is further evidence of more trouble ahead. Be careful with your long positions, the coming days for the economy will be even worse than currently are and we might see a test of a low before a new fundamental and real bull market starts, that's my opinion but only time will tell if I'm right. The markets are now moving just on hopes.
Be careful!!!
The company’s fundamentals keep being under pressure and will continue to deteriorate as profit margins get squeezed from higher costs and the inability to pass those costs on through higher pricing. Everyday more companies cut its forecasts and sales. The longer employment numbers persist, the greater the danger that economic activity will contract even further. I suggest that we are under a bear market rally instead a new start of a bull market. The current rally is nothing more than a bear market rally and nothing more. The momentum behind it has been terrible, which is further evidence of more trouble ahead. Be careful with your long positions, the coming days for the economy will be even worse than currently are and we might see a test of a low before a new fundamental and real bull market starts, that's my opinion but only time will tell if I'm right. The markets are now moving just on hopes.
Be careful!!!
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