Despite another huge amount of unemployment claims the indices are trading higher again this morning. There has now been about 26 million unemployment claims in the last five weeks and all job growth since the 2008-9 recession has been wiped out, but the S&P 500 is up around 25% in the last five weeks.
Market participants explain the action by claiming that the bad news was fully priced in during the decline in late February and March, and now the market is looking ahead to a better future.
This argument of fully discounting the economic damage that has been done is at the heart of the current market debate. Bears scoff at the notion that the market has fully recognized the ramifications of what is happening to the economy but bulls are confident that a combination of massive stimulus and a quick reopening of the economy will keep the damage contained.
Based on the current price action the bulls are winning the debate so far. It is quite upbeat out there again with breadth running 5400 gainers to 1700 decliners. The skeptics keep getting squeezed as they wonder how this market can keep running as the economic damage piles up.
All we can do is stay focused on the price action and wait for it to shift. My thesis has been for a trading range to develop but the price action is stickier to the upside than I anticipated.
I continue to work on knocking out some trades in individual stocks. I added to a position in my Stock of the Week, Mersana Therapeutics (MRSN) and also have positions in Cassava Sciences (SAVA) and Co-Diagnostics (CODX) .
I'm not very trustful of sustained upside momentum in the indices but individual stock picking is working so that is my focus.