WHY DID THE MARKET RECOVERED SO FAST?

In business, economics or investment, market liquidity is a market’s feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset’s price. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. IS ALL ABOUT LIQUIDITY!! NOW THE MARKET HAVE SO MUCH LIQUIDITY – BUT DO REMEMBER IS ALL DEBT BASED.

Central Banks pumped in so much money that the market have never seen before – forcing massive liquidity to the market; the question now is about DEBT and pay back time – can the economy jump start fast enough for the central bank to level off.

SP 500 & VIX (FEAR INDEX)

The market is fearless – investors are just rushing to the market to take a little of the bullish pie. VIX – Created by the Chicago Board Options Exchange (CBOE), the Volatility Index, or VIX, is a real-time market index that represents the market’s expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors’ sentiments. Investors fear disappeared – everyone just ignoring the fundamental side of the economy and company earnings and etc.

The US Employment which was expected to weak – ended with 2509 jobs positive – that turned around the entire market yesterday with a massive rally of more than 800points

PSEI – MACRO & MICRO PICTURE

KEY TAKEAWAYS

  • Take profits and buy companies that you are familiar with
  • Be cautious our buying companies that are offering Bonds
  • WATCH for future earnings & dividends payout
  • Pay careful attention to market capitalisation & Return on Equity
  • Moving forward traders must learn to be cautious – as the market is still fragile.

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