US SPX500 Index futures dived almost 1.5% on the news of missile attack on two US military settlements in Iraq. Futures market got panicked and lost 1.5%. However, US did not reply immediately but President Trump tweeted of a news conference tomorrow. The market recovered to only 0.27% drop to SPX500 futures index.
What is going on? Why do not the loss continue?
The answer is the momentum of the bull market keeps it going. It is just hit by a speed breaker. But it still moving further due to its sheer momentum. The total extinguish of momentum takes time.
What we saw here is that Market is very sensitive at this moment. The delay in harsh reply from President Trump is a good news for Investors. In a tremendous bull run such as this investors sees bad news as a good news for a while until it is a severe bad news. The momentum is losing which means bullish sentiment is diminishing. When it will reverse, the sentiment will turn around to bearish. Then a small good news will feel like a bad news.
NASDAQ100 Index gained 39% and SPX500 index gained 31% last year without a correction. Therefore, a correction is imminent. But the sheer momentum kept it going until a severe bad news work as a speed breaker.
Similar to this, the altcoin bear market still has lots of momentum. For example, BTC has gained $600 but Steem lost 10% in the last couple of weeks. Crypto Investors are still following Bitcoin maximalism strategies. It will require a severe speed breaker to halt altcoin's bear run. Everybody is expecting that after BTC's halving BTC will reach ATH, then altcoin bull run will begin.
As I said earlier we are in Bitcoin bull run since low of $3150 during December, 2018. It is getting momentum as halving is getting nearer and also, BTC performs better during geopolitical volatility.
Over all, it is hard to break abruptly a bull run or bear run. The sentiment to turn from bullish to bearish require many speed breakers to halt the powerful momentum. US equity market have just hit the first powerful speed breaker. It will require more such breakers to trend to be reverse.
Personally, I believe the gain in equities will be negative since a correction is required after a 39% gain on mixed earning reports and slowing economic indicators but fueled by rate cut, quantitative easing, euphoria on US-China trade deals.
However, 2020 could be the year when altcoin bull run will begin probably in Q2 and just after BTC halving.
Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions. This opinion is only for educational purpose.
Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.
Thanks for reading.
Cryptominer , occasional trader and tech blogger since 2013
