Stock Prices reflect the future, for there is no other way to profit by going long.
Prudent speculators buy now when they believe business conditions in the near future (six months or so) will be more robust and thus all known measures will be higher.
For if that holds true, then prices will rise to meet those future business conditions. Having bought at lower prices, speculators become poised to profit if they sell on future higher prices.
That is only sure way to profit on going long.
Punters (i.e., the naive) buy stocks when prices are rising because they believe prices are going up. To them, "business looks great; stocks can t help going up."
That is why they lose always in the end, because if business looks great now, then prices have advanced already to meet this greatness. In short, they overpay for stocks that more than likely will fall rather than rise unless there are commercial reasons for business conditions to advance further.
Without advancing business conditions, stocks can go only one way and that is down. That is why the smart sellout long before punters realize it. It is then that a crash happens as punters panic sell.
So why this quickie dissertation from how stock markets really work?
No one of prudent commercial intelligence could expect a booming economy under Joe Biden. A Biden election surely will bring more regulation, higher taxes and a hampered economy.
Thus speculators must believe that Trump will win in November and likely have better data as to why this is so.
The S&P 500 has recovered in 3 months almost what it took 14 months to achieve because of advancing business conditions. At each step, those who bought prudently had to expect a rise in business conditions for a profit to be gained.
The 3/16 crash of $2,304.92 was 4.6% below the 12/17/2018 quote of $2,417.62.
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