AndreaGrey

Possible outcome...

Short
AMEX:SPY   SPDR S&P 500 ETF TRUST
It may be reasonable to consider that if in a recession we will see near 50% market correction. Looking at the chart we can see a possible outlook based on Elliott wave pattern starting in 2008 and a good correlation to the bottom of a megaphone pattern as indicated on the cart. We can expect that the bottom of a recession will not happen all at once regardless of how fast this selloff has been. Of course, calling a bottom is never a good idea, however, we should look at past performance as a guide remembering that every recession is unique. Some of you may remember that I was looking for a correction at the top of the megaphone back in October but instead the market when parabolic. This should have been a big clue that the market was becoming overheated and was to come down. I believe much of the delay had to do with the Fed propping up the market much faster than in the past. Additionally, I do not believe that the virus was the problem but it was the catalyst for this move and for the fast pass that the market has come down.

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Until there was stimulus...
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AndreaGrey FocusedAlpha
@FocusedAlpha,
Hi there, The stimulus is definitely something that every trader needs to keep an eye on at this time. In addition, I would say that even if energy is not a focus for you it would be good to follow along with the housing/mortgage market. More could be added to this list and this just adds to the reality that the current market is under a great deal of pressure and uncertainty. New developments will likely lead to swings in the market some big some small but in general, I believe that the trend will continue down largely because the headwinds are just too strong for a bull market return at this time. Many charts show that the market (not individual stocks) is still overvalued at this time and until more of them become bargains larger value investors will stay on the sidelines waiting for opportunities. Good luck in your trading...Andrea
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Nice TA
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