What is driving the market – shear emotion?

[Randall Beam]

#20437

I do not understand why anyone would be buying at this point; other than individuals & institutions that are buying short term & hoping to exit before the bubble pops again. I know that select stocks, might be a good buy, but not the general market?

[Sean Hyman]

#20443

Randy, check out this past Thursday’s weekly video and you’ll have my thoughts in detail to answers to questions like this. But bottom line, institutional shorts have to cover their shorts to lock in those gains. Shorts are covered by buy orders. Also, institutional traders have traded this bounce (just like we’ve done in 401ks recently). But that can go as quickly as it came. We’ve exited around 2800ish, after having gotten in at around the 2200-2300ish area.

Also, the “dumb money” aka average retail investors, see it as a “buying opportunity” because they think the downtrend is over. They’re always too quick to jump back in. Valuations on the market averages are still way too high. And retail investors haven’t gotten their pants scared off yet. All of that has to happen/change before we get a real bottom.

[Anonymous]

#20574

Hey Sean what earnings reports should we pay attention to the most? Is there a general announcement of said company(s) or market as a whole? When do these take place, during the day while the U.S. trading session going on? Hope my questions make sense

[Sean Hyman]

#20576

None. We already know earnings reports will be bad for many companies with the country almost shut down. But our system doesn’t go off of quarterly earnings reports which would be fickle and have you in something one quarter and out of it the next. This is my investing system, which is not based off of quarterly earnings reports: https://logicalinvestor.net/members-only/my-complete-investing-system-how-to-allocate-your-money/

Most earnings reports take place “before the bell” or “after the bell”, meaning before or after the market is opened/closed. However, our system, like Buffett’s doesn’t judge a company quarter by quarter, but rather, by its overall fundamentals which don’t change often.

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