My wife and I finally decided to open up a TFSA trading account last week. I had picked out the companies and number of units we were going to buy and set up the account. But in the time that it took to set up the account, everything I had my eye on has increased an average of 20%. What is driving this? There have been some positive news releases, but I am not sure if it warrants this type of growth. Is this just some pent up urge to buy that was released because of some good news, or is it more than that.
What is going on in the markets these past few days?
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Wish I knew. Volatility cuts both ways. Stocks just as easily have a melt up as a melt down. I'm expecting a largish refund this year and was hoping that stocks will stay down. Short-term stock movements are impossible to predict.
The news hasn't been exactly positive. With a few exceptions, companies have been beating the 'lowered' revenue estimates - most companies on my radar have profits 0-20% of last year.
Many of the classic defensive names haven't been gaining - this is the cheapest they've been (P/E wise) - and they're the only companies that continue to be profitable.
Heck - the invincible Canadian insurance agencies are posting losses!
Yeah I guess I should have phrased it, "the news has been less bad than usual". Looks like things have cooled off a bit today.
Agree.
Right now the S&P 500 (and each of the major US indices) is trading close to break-even point for the year, and near its 200-day moving average. For traders, these sorts of points present psychological barriers. The markets have rallied about 20-25% or so since the March lows. That kind of momentum is hard to keep up. If good news keeps coming in, or if some of the traders shorting into this bear-market rally get squeezed, we could see the markets move even higher. I would be surprised if this happened this soon though, as much as I would like to see it. If this board is any indication, some people were hunting for bargains, in March and April. Now I sense that there is some ambivalence, as in the current valuations aren't presenting the bargains investors want.
Maybe many companies had low-balled their Q1 earnings forecasts, leading to some positive surprises. By now, I would expect those positive surprises to be priced in to the market by now, with investors now looking ahead to Q2 earnings. Barring some unforeseen surprise events, I don't think we're going to break through this resistance until Q2 earnings come out. After all, stock price gains can't outpace earnings growth in the long run.
Of course talk is cheap, and I don't have anything to lose by making a a prediction.
Maybe many companies had low-balled their Q1 earnings forecasts, leading to some positive surprises. By now, I would expect those positive surprises to be priced in to the market by now, with investors now looking ahead to Q2 earnings. Barring some unforeseen surprise events, I don't think we're going to break through this resistance until Q2 earnings come out. After all, stock price gains can't outpace earnings growth in the long run.
Of course talk is cheap, and I don't have anything to lose by making a a prediction.
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I saw a video where one person suggested at least a 50% pull back. His belief was that there is a lot of panic buying by people trying to get in and not miss this bull run. They sat on the side lines while they lost a ton of money and are afraid to sit on the sidelines during a bull run. I'm inclined to agree with that.
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Ultimately, I plan to buy for the long term, and many of these prices still provide good dividend yields... but I do keep selfishly hoping for the prices to dip back down and stay low for a couple years.
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Sorry, that was my fault.
I bought some bear ETFs which caused the market to soar. I reduced my holdings so we should be seeing the long awaited correction next week
Now that would be awesome!
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