TL;DR Dow Jones hits $25K then Corona deaths and unemployment knock it back to $20K.
The stock market will rise to around ~$25K in this bull trap. Over the next 2 weeks, the domestic coronavirus death toll will rise. The fed will continue to pour it’s $4 trillion of recently funded money to pump the stocks. But will realize they are pushing on a string.
Some of the public may bite on the rebound thinking this the turnaround #fomo. The obvious reality for most Americans is we have little to no liquid cash to place in the stock market.
So the call is a run-up to ~$25K–26K within April. This gives consumers false confidence things are ok. It’s propped up by the money congress gave to the Feds along with whatever gasoline the hedge funds can muster. If this gets the middle class to buy in that’s great. If the progress on the coronavirus does not match in optimism then the rally will be stuffed out hard and we will be testing $20K again.
The Fed protected hard from dropping past the $20K marker. As a nation, I feel if we drop below $20K that is when murmurs of depression will come into the fold.
The only way for the depression to really take hold is if mass unemployment (>30%) occurs along with an inability to flatten the curve on coronavirus. Then we will be in for a rude depression.
