Why Is the Stock Market Already Trading Up 6.5% In 2020?

Posted On February 14, 2020 2:39 pm
By: Steve Smith

The stock market continues to power to consecutive new highs; as measured by the “SPDR 500 ETF (SPY)” already up some 6.5% for the first six weeks of the year. And, despite a variety of events, from the Iran/Iraq missile issue to the current Coronavirus, that could have provided valid reasons for a significant market decline, nothing seems to be able to derail this market.

In fact, that rally has been scarily controlled and linear, with 87% of the past 70 trading posting gains. It’s as if a flying saucer is hovering above, shining a beam drawing in dollars and driving prices inexorably higher.

It’s probably no coincidence the lift-off began in earnest just after February engaged a new round, pumping liquidity into the market on Sep 18, 2019. They can claim ‘it’s not QE.’ But, it amounted to some $120 billion in funds made available via the repo market on a daily basis.

That was the… Continue reading at StockNews.com

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.