For the S&P 500 stock exchange, the vaccine hope appears to be the only “thing” that keeps the optimism on the stage.
With the S&P, presently, we are at the previous high of 3 320. Significance, the marketplace is not actually sure what to look out for anymore: still spreading the vaccine hopes. Today, it appears the latter is taking place.
What the next move will be?
“The consensus shows that the pain, the toll, the hurt will be largely felt in the second quarter, and then improving in the third and fourth quarter and seeing some signs of a rebound in 2021 so while we may not know the numbers directionally, what we should see is some consistency – that as the economy reopens, even if it’s bumpy, even if there are rising risks with these new outbreaks, that there is some sense that the economy is recovering in the second half of the year, and that earnings will live up to that recovery and stock prices will continue to climb.”
Let’s see if the bulls can duplicate the pattern of the previous upward wave the S&P followed in May. How likely is that? Rather possible, considering that the reports about vaccine advancements keep coming more frequently.
A cynical situation based on Trajectory 3 recommends that we are in fact point of another “wave” which will bounce below the resistance of 3 230. How possible is that? Likewise really likely: cleaning screening procedures are great, however, we do not have the vaccine yet. It might take months before we see it.
Some experts are saying that the marketplace will ignore the lack of the vaccine and handle a more favorable state of mind. That will be Trajectory 2.
The important thing is that it might be not till the very end of 2020 when the vaccine ultimately gets done. Everybody understands that.
If the S&P was just awaiting the vaccine, then it would be going sideways in between 2 980 and 3 230 now.
Is that most likely? No. No matter the vaccine procedure, the more we move into the future, the more the marketplace ends up being insensitive to the truth of infections and, for that reason, independent from the vaccine hopes.
Why? With the vaccine or without it, life goes on. And even when the infection is now growing in the United States – once again – it will decrease quite quickly. So the concern is not “if” however “when”. And the marketplace is tired of waiting.