Stocks are up against big 'resistance' and likely need actual economic improvement to overcome it

The market's reliance on the largest, most potent growth companies in technology is still seen as both a virtue and a vulnerability.Much further upside from here probably requires more substantive indications of successful resumption of economic activity rather than just feints in that direction.

Last Wednesday, the S&P hustled to a high of 2939, traders seizing on any hints of progress against Covid-19 and celebrating government financial support that together could cushion the lockdown's impact and shorten its duration.saw a favorable Gilead antiviral-drug trial and an affirmation by Federal Reserve Chair Jerome Powell of aggressive, open-ended liquidity support for the economy

There is no deep, inherent significance in these familiar index values, no magic market muscle memory that flexes as they are revisited. Though in this case, the level was right where the index regained just more than 60% of its total losses, often an area where rallies pause or reverse. Both before the February peak and after the panicky market low of late March, the popular giants of the Nasdaq outperformed the market handily. The market rationally was privileging dominant digital platforms with stable long-term cash flows in an iffy economic environment.

This erratic interplay between large and small-cap benchmarks in recent weeks is visible in this Bespoke Investment Group chart of Russell 2000 vs. S&P 500.A rally is nor more valid or durable when smaller stocks lead, and the steady underperformance of small stocks for most of the past few years has mostly been a footnote to a bull market.

'likely need actual economic improvement to overcome it'- WOW never thought the stock market was dependent on the actual economy

Enormous liquidity bumping into market and interest rate is zero, massive supply of the money will cause the asset to inflating rapidly if reopen the economic to see the light

you mean securities are just abstractions derived from reality? and if they ignore reality then they fail to have an actual meaning? whhooooooaaaaaaaaaaa

I tend to disagree with this. The unprecedented liquidity in the system, combined with a slight bounceback in consumer sentiment in the next two months, will likely push equities to new highs. The monetary pumps are going at full speed, and higher asset prices are coming.

Definitely more risk than reward at this point .

, this is a nightmare! It will pass! Everything's gonna be okay! God bless America!

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