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Senior Advisor

never say never

I guess.

It's a truism that I have generally thought ironclad that the NASDAQ always fills downside gaps, which is kinda duh because the index was recently at all time highs. But I woulda bet heavily it would never fill the upper gap from Feb.

Hasn't yet, but trying. Some big techs like AMZN and NFLX are benefitting from the crisis but I still have to believe there will be a sharp setback in aggregate earnings.

Even before the crisis, valuations were historically stretched and this requires some real stretching. But the thinking goes that in a world where interest rates are 0 forever, anything that makes any money is worth anything.

History says that isn't so but this is sort of without precedent.

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Senior Advisor

Re: never say never

Far from any technical confirmation but looks like da boyz who got caught with their knickers down around their ankles when the "don't fight the Fed" rally collapsed got a chance to unload that crap on widows and orphans.

If you look at the Dow as opposed to the Nasdaq (SP5 in between) it looks like the same 50% bounce after the initial crash in '29.

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Senior Advisor

Re: never say never

Virtually nobody believes in a V shaped recovery any longer.

Objectively speaking, this is much worse than the GFC where stocks fell sharply. But that one was very finance centric and in this case the Fed moved quickly to stop an immediate financial crisis.

But I'm still having a hard time thinking that stock valuations won't adjust to the reality of many quarters of double digit unemployment and maybe more until GDP gets back to Q4 '19 levels.

For now, about half of the unemployed are getting UEI and there are the stimulus checks.

Jerry says that won't be sufficient.

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Senior Advisor

Re: never say never

Lo and behold, almost closed the gap in the Q, but fading back now.

Da boyz ramped the futures yesterday to get a strong opening.

We do have a potential 5 of 5 of 5 of 5 completed top, but absolutely no confirmation.

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