Bulls are in control in spite of the Stock Market Worldwide seems to be disconnected from reality

     Stock market is the one market where fear, grid, fickleness,panic response,anxiety  rules and most of the time with all above human fear related attributes  it tries to reflect real and logical with  the futuristic trend based on the health of real economy. But it is no where near to it. This market always discounts / credits the future happening in the sector/industry or specific stock and pare down or adjusts the prices much before the bad news or results reaches investors. Most of the time big operators, FPIs, Mutual funds and big broking houses takes a call much in advance giving no time for small retail investors. Small retail investors then take a call either too high or too low. So, this market is also full of cartelisation, insiders passing information and now a days AI to keep doing analysis of millions of daily trades to find out precise exit and entry for big fund houses. They in fact rule the market with ease, cutting technology at their disposal and large funds.

    And this is not new since the advent of stock trading in Chicago it is normal for stock market worldwide. The only difference is technology that has improved in last two decades in hassle free trading and automatic credit/debit of fund as well as shares in depository thus keeping out the dangerous physical share transfer form and time to get share transferred in own name. This was a dubious time-consuming process and millions of investors lost money due to this archaic system of share transfer. Duplicate share certificate, seized certificates, wrong signature etc were the reasons where one loses money. But the technology driven stock market system has set these rights. This was a most needed reform in the market. However technology has its own disadvantages. 

    The cyclical process of market going up or down and preference to certain sectors during certain time were the normal process in market

    But surprisingly during corona time the market is slowly showing a sign of major disconnect with the reality. The worldwide economy is under severe stress and rightly so in the month of march 2020 all major stock markets touched its bottom but the next four months after hitting bottom was a different story and the market has recovered most of the losses. This is very puzzling and also first time it seems that market is not seeing the future trend clearly and thus this confusion. The bull took the control of Wall street as well as Dalal street. Why it is happening like this!

     One thing is that market is less sure about future and the quantum of Covid damage to economy so the rate reflects near term quarter and acting on all good news in regard to corona prevention and vaccine.

Second is that there is example in other sphere where things continue doing better in spite of it disconnect with the society and economy at large. And continue for too long too long  till the reality finally struck or till the long-term recovery improve and matches the expectation.

Something similar is happening in the stock market also the trend and process are not in line with reality and the health of economy. And to  add to this millions of new age investors started active trading out of interest /ample time/making quick buck or may be out of boredom during Corona period. These new tech savvy young investors are investing in the market without thinking too much for its connection and disconnection with the economy. They are just riding the bull after the march low with good appetite to risk and also new way of seeing the market. 

    Therefore, like COVID this phase of stock market also represents new normal where there is huge possibility that market will keep showing bullish trend for long term defying the reality. It would be interesting to see whether the positivism of the market will last till the real economy start improving or it will falter at an opportune moment in consortium with large stakeholders  of the market.