Markets are full of risks – from CoronaVirus contagion disrupting economic stability to Repo liquidity disrupting money markets and both that fuel Credit market dislocations. I review key Macro-to-Micro concerns, charts and price levels.
“This is not a drill. This is not the time for giving up. This is not a time for excuses. This is a time for pulling out all the stops.”
– WHO Director-General Tedros Adhanom Ghebreyesus
And that’s what market expects from Fed with at least 3/4 point fed rate cut next Wednesday, from CDC with roll-out of COVID-19 test kits nationwide, from Congress with a fiscal stimulus plan to combat COVID-19 economic effects, and from Trump to protect lives and capital markets.
With that, it has been an exhaustive effort past few weeks to scan, collate, analyze and synthesize all the data of late. But it has served us well in timing market turns:
- Just 3 days before a 15% market correction in a 7 standard deviation move, I warned “market feels like it’s gonna break” – after being bullish for months.
- Then Friday Feb 21st, I expected a gap down Monday. We gapped and continued to sell off each day that week, and each day I said “Not safe, no need to cover shorts”.
- Each day I called out that there was “MASSIVE DISTRIBUTION” under the surface and it was “Not Safe” while recommended “CoronaVirus” longs outperformed.
- I reminded clients daily – “no momentum, no volume, no bid” – Until Friday the 28th when I predicted a Monday gap UP, a likely 50% fib retracement and lots of CHOP.
- I gave a price target of SPX $2938 for Friday morning March 6th after a 4%+ ramp day before.
- I gave a price target of SPX $2778 for Monday morning March 9th unless Sunday night intervention was announced. Instead, we got a Saudi Oil War.
Pandemic, Cowbell; Liquidity, Liquidation; Trump, Panic – there’s a lot moving markets!
Let’s navigate it together in my live trading room!