Wednesday, July 1, 2020

Bond buying: Opinion: Watch these two important levels in the stock market to see which way prices may go

Here is the article. 


The stock market’s spin masters are working overtime persuading gullible investors to put money into equities.

The Federal Reserve’s money printing and the government’s support have injected confidence into the market. But those actions come at a steep cost. And make no mistake that in the end, the rich will benefit the most. The average Joe or Jane is not a meaningful investor.

Support/resistance zone

Investors should watch the lower band of the support/resistance zone, which is around the Dow level of 24,000 points. The equivalent in the S&P 500 Index SPX, +0.50% is 2,900.

Arora’s Second Law of Investing and Trading

Consider embracing Arora’s Second Law of Investing and Trading: Nobody knows with certainty what is going to happen next in the markets. Consider following up with Arora’s Third Law: Making investing and trading decisions based on probabilities is the only realistic and profitable approach.

Bond buying

Who would have thought that the Fed’s high priority is to make big, rich companies richer using its emergency-lending program? The Fed bought bonds of AT&T T, -1.09%, Walmart WMT, -0.07% and UnitedHealth UNH, +0.94%.



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