Yesterday, the stock indices opened decidedly lower amid North Korea’s firing of a missile over Japan. However, the indices refused to go lower. The investors saw it as the buying opportunity and the indices finished the day with small gains.
In this market environment, nothing can send the broader market lower. If we were going to crash, it would have happened weeks ago. When the market is fragile, investors are nervous, any slight negative news can send the market lower instantly. This is definitely not the case today.
The market is standing on solid ground. If there is a dip, the confident dip buyers move in. Rather than get weaker, this market has been getting stronger. The GDP was revised to up 3%. Corporate earnings are solid. Despite the fact that the FED has raised interest rates, but the rates are still low. As long as the growth can sustain, it’s difficult to see the market correction at any time soon. Of course, this does not mean the euphoria can last forever. It’s just a matter of time when the market corrects itself.