The Gilmo Report

May 20, 2020

May 20, 2020 3:35 pm ET

The market pulled its signature move once again by suddenly selling off into the close yesterday but then gapping up sharply this morning to erase the bearish losses in bullish fashion. This is part and parcel of the market’s zombie-walk rally protocol.

After getting hit hard in the first part of the week last week and stumbling backward, much like a zombie taking potshots from a shotgun, the market simply surged forward again to make higher highs today. The NASDAQ Composite Index illustrates the zombie-walk rally with three sharp two-day sell-offs over the past month that failed to kill the rally as it turned and rallied each time.

The NASDAQ is now within spitting distance of its February all-time highs. Within the context of underlying conditions and the immense uncertainty currently plaguing businesses, over 100,000 of which have now shut their doors permanently in the U.S., it may strike one as utterly surreal, but I can assure that continuously higher stock prices are very real.

 

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