No, that’s not necessarily correct. Stocks reverse course higher still when news is bad, in the case of a bear market bounce. Why? They’re short-covering rallies mainly.
And later on, the “real bottom” happens before the news turns positive because 1) stocks overshoot to the downside at some point, more than reflecting the worst possible case scenario into the stock’s price/index’s price and 2) because stocks are forecasting mechanisms due to the fact that institutions are always saying, “What do we think will happen 6-12 months from now?” And they invest today in light of that. So, stocks turn up before the news becomes good again.
The ETF that I prefer is SPY. Low cost, liquid/high-volume, widely tracked/followed. Today, we got close enough to my first entry number for 401k’s/IRAs. Mentioned that at the time when the S&P 500 was in the high 2200’s today. Then there are still two deep averaging down points left after that, should the market drop that far. Good chance that, after the bear market bounce, it does retest the former/old lows and likely then some. Right now, the retail public is still too confident to try to buy in. Real bottoms don’t happen when that’s the case. Also, the average P/E on the S&P 500 is still not even in the fair value phase much less the undervalued phase.
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