Why the current stock market rally looks unsustainable

Because the underlying cause still remains……

Stock futures declined before markets opened today, indicating that the end is near for the ‘I have never seen before’ three-day rally that saw US equities exit the dreaded bear market territory.

The ferocity of the decline that started on February 21, 2020, made no sense and neither did the strong upward surge that started on March 24, 2020, as the underlying factors for the decline continued to remain intact.

As of Thursday (March 26,2020) evening, the United States had at least 82,100 cases while China was reporting 81,782. There have been more than 510,000 cases reported worldwide.

If the decline was caused by the spread of Coronavirus pandemic, how will trillions of monetary aid stop the economic fallout?

It will help soften the impact of the economic fallout caused by the health crisis, but will it get people back to their favorite restaurant for dinner on Friday? Will it help someone who is worried about his job to upgrade his smartphone this year? Will it help companies increase spending when they are clueless about demand in the next three months?

Fear drove investors to sell as much as possible as we were on the way down and many jumped back in when things started moving…