Impact of COVID19 made its mark on world economy. Investors and shareholders are losing faith in stocks and overall stability of the financial infrastructure.
I share personal curiosity on how and when the market will enter the stage of recovery.
Governments across the world are paying big price to compensate the fall of economic activity.
Central banks are lowering interest rates to contribute hard efforts by easing monetary policy alongside governments fiscal policy to revive the faith of the system after recovery is completed.
The hazard of a new financial crisis is inevitable despite of these actions.
For more than 10 years US economy grew at high rate. In such overbought condition of the markets, people needed a good excuse as an informational reason to make a big correction and COVID19 coincided into these events like a last mozaic piece to justify the sell by almost all involved in the "game". Moreover, when the it grew over 2500 points, we could literally see how bulls were showing last available efforts to push it higher and the shape of the growth was slowing down with subsequent heavy corrections which completed the pattern of reversal.
What we saw:
In my view:
I share personal curiosity on how and when the market will enter the stage of recovery.
Governments across the world are paying big price to compensate the fall of economic activity.
Central banks are lowering interest rates to contribute hard efforts by easing monetary policy alongside governments fiscal policy to revive the faith of the system after recovery is completed.
The hazard of a new financial crisis is inevitable despite of these actions.
For more than 10 years US economy grew at high rate. In such overbought condition of the markets, people needed a good excuse as an informational reason to make a big correction and COVID19 coincided into these events like a last mozaic piece to justify the sell by almost all involved in the "game". Moreover, when the it grew over 2500 points, we could literally see how bulls were showing last available efforts to push it higher and the shape of the growth was slowing down with subsequent heavy corrections which completed the pattern of reversal.
What we saw:
- The heavy drop to 2200
- The current pullback from the decline
In my view:
- The structure covers the last 20 years of historic patterns.
- The general growth was fit into the fib channel.
- The angle of two connected tops is equal to the one dragged from the bottom.
- Hence we got demand levels which is flexible to the general growth.
- If the decline will continue we have all key levels of reversal.
- The current pullback is viewed in terms of white fib channel.
- If the situation gets out of control and turns into a recession. There is a horizontal line of the peaks from year 2000 and 2007, which nowadays after so many years of growth, will carry a role of support level for recovery. It's named as "AREA OF RECOVERY".
