"Buy and hold bulls" are heading to the slaughterhouse. At least that's why the short term charts are indicating. If there was any doubts that being a trader (short term "investor") is better than being long term investor, this latest market crash confirms it. Get ready to see something you have never seen before. WAIT, we're already seeing it and just like 2007/2008, most people are totally confused and guided by mass media! No time in history has the crash been so violent.
The real deadly "pandemic" isn't biological, it's financial. The financial markets are predicting very sad economic times ahead starting with the people who are the weakest. Very unfortunate. This is where capitalism fails. We fail to have proper safety nets.
Getting back to Just Charts! On the 15 min time frame it's a confirmed continue sell/short but not for long in these market conditions. If you are an active trade, you'll know when to buy the dips at botttom support with a tight stop loss and sell as soon as it bounces to the top resistance lines. If you are an investor, sorry, the only thing I suggest is learn to trade and avoid having any positions at the end of the day unless the directions is clear and the risks are low. Always be ready to cut your loses and get back in short term when everyone has puked (capitulated).
Be ready to move cash out of the markets entirely into safe asset classes (guns, ammo) but not right now. Medium term, the bounce will happen on virus cure or when mass media starts focussing the on the very low mortality rate. Long term, cash will be losing its value so the last thing you want is to hold on to that mass trillion dollar dilution. Where to invest? "Real asset classes". Things people need to survive hyperinflation which won't be able to be controlled by governments. If you disagree, please comment why. I am a student of the markets and I don't have all the pieces to the puzzle figured out. Yet...
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Gap down on open? L1, L2, L3 circuit breakers going off.
"The lockdown affecting large segments of the American public to try to curb the spread of the coronavirus is likely to last 10 to 12 weeks, or until early June, U.S. Treasury Secretary Steven Mnuchin said on Sunday." (March 22nd, 2020)
"New York Stock Exchange Shuts Floor As Coronavirus Spreads" (March 22nd, 2020) But the NYSE will "should" stay open.
I would not be surprised to see Level 3 Circuit breakers to go off in the markets tomorrow. This is massive news. Not all bulls will fall, so capitulation isn't here.
There is no end in sight of bearish news except for some possible minor news (distribution of cash directly to individuals). I like the idea of calling this "Spring Break" and give everyone the time off. All payments for everything postponed and the government sends the stimulus cash directly to individuals. Call it CETW "capitalism emergency temporary welfare". The past stimulus wasn't effective because banks and large corp never distribute the money down to the people. That's where it needs to go directly and quickly to allow the masses to continue to live through this "broken capitalism system". From a trading perspective, only trade if you know how because this will be a wild ride.
On the bigger picture, the saving grace for humanity is that we always find a solution to our most complicated problems. Money is just "IOU" from governments and if you live in a stable country, you should be good.
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Bulls managed to break the downtrend, thank to the Fed's "we'll buy everything" and Trumps desire to "restart the economy". You know, pressing that magic button "Fix". LOL Don't fight the tape, we'll go up to retest 244 but market bears are eager. The government intervention is getting priced in so after than you really want entry and exit points.
Why would it be bad to buy and hold If you only buy now as it goes down an wait 1-2 years for it to go back up?
UnknownUnicorn2413721
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@celroid, good question. Buy now? Based on what? Fundamentals are broken now with a global shutdown. First, there is no bottom. We still aren't oversold RSI on the Monthly timeframe. Week RSI around 20 is oversold and ready for a pop but that's like being in Sept 2008 when it was also RSI of 20 and it took 6 months of more pain and additional 50% loss the S&P from the 900s to 600s. So why buy now when the odds are that it's going lower? You also can't assume it will just take 1-2 years to go back up. Look in March 2000, when the S&P was 1552, it took two years to crash to half its value to 768 in October 2002. From there, it took 5 years to go back up to 1550 and topped at 1578 on October 2007. Then down to a new lower low of 666 within 18 months March 2009. From there, it took 4 years to recover to 2007 levels. A total of 6.5 years to recover and the bull run was confirmed.
The big problem with the markets is we don't know where the bottom will be. Nobody knows but the charts will tell us when to get in or out. Otherwise, it's 100% gut (that's flying blind with no instruments on a cloudy storm period at dangerously low levels). We have a long way to go to full out market capitulation and I have over 20 years "investing" experience. This is not a safe time to be an investor but a great time to be a short term trader. The Month charts shows that we might be heading straight down to around 1366 by this summer. Fortunately, we should have a nice bounce or rebound at support first in the 2100 range and again in the 1500s. One the positive note, all this money printing will make all assets more expensive and that includes stocks. So that's an important bullish angle when the markets recovers. We haven't even begun and all the signals are pretty negative except for dead cat bounces.
Any product/service that is inversely correlated to the depth of the Wuhan BioMonster/escaped BioWeapon will do fantastically in the COVID19 paradigm. Some of mine have taken off to the Races already!
Ie. Hand Sanitiser Co's/PPE gear/spec. Cure/Vaccine Biotech/Funeral Directors etc etc.
Best Regards and thanks for your wizened perspective.
WoodyDriver
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I agree with your assessment. There will most likely be a bounce when the "cure" is revealed. Most likely from China. They may already have it. They create the Chaos, then the cure...and they come out as the heroes in this whole thing. The media will praise them, and talk about turn around in the market sentiment. But, then earnings will come out and it will go back down. Hopefully up again.
Another factor to consider is that "talk" with Saudi Arabia that Trump will have when the Virus situation is dealt with. News make come out that Saudi Arabia will cut oil production, which will boost the stock market. Or....There will be a war....A big war. Or...."Somone" will bomb the hell out of Saudi oil fields causing oil to go through the roof!
If a "cure" comes out, while Oil goes up, this could be a "V" shaped recovery. There will be damage. There will be transfer of wealth...there will be failing businesses and the strong will survive - coming out stronger than before because their competition will be dealt a DEATH BLOW!
ich1baN
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@WoodyDriver, already been proven by 2 independent countries (China and France) that Hydrochloroquine is an effective anti-viral against CV-19 and even more effective when combined with azithromycin. It's not a cure but it has been shown to reduce the symptoms quite significantly getting you back to your feet more quickly.... this should be en masse sent to every hospital as a stop gap until a better cure / vaccine is found. Trump was quick to see it as well as last week he pushed it through the red tape barrier to get it more quickly in the hands of hospitals but the stupid FDA / CDC seems to want to wait for clinical trials for results... well, we don't have time to wait as China and France already confirmed this works. There will be more downside until we start using Hydrochloroquine + azithromycin on a large scale; once this occurs, the death rate will go far under 1% and we will see markets rebound quite fast... we may see a market bottom this week or next week depending on how fast they push the stimulus money and the anti-virals.