Lest we Forget, Things have Changed, with update

Big Picture

First, we all need to recognize that this is becoming a humanitarian crisis, no longer a market.  So I would say this is a high risk investing environment. I don’t know if it is worth the risk to trade while an intuitive corona virus management plan is in place in Washington.

The market completed 99 % of its forecast first leg decline yesterday, but on a sobering note did not make a technical bottom. So a Relief rally is welcome.

As we said in our special Sunday post yesterday, everything has changed but the S&P stock market is close to cleaning out for the near future.

This morning

This morning, the first shot out of the short term support area went almost to the first swing point between overvalue and undervalue at S&P 2429. That makes things difficult for most investors and traders, if they want to be buyers they are almost immediately in a risky trade, there is little value above 2429.

To Review

Just to review, there have been two parts to the stock market decline that we have just witnessed.

1. The first part was the unravelling of the manipulated market above S&P 2722.

2. The second part was the virus effect that took the S&P to below 2200.

What is making us a bit worried, is that the market yesterday did not complete a washout to 2137.  This leaves the market vulnerable to any bad news.

So government is starting to throw a lot of money at the market and a new swing point is now emerging on the S&P and that is 2429.

This makes the current trading range to be 2137 to 2722 on the S&P.

Scary Level for Investors

What investors don’t want to see is trade under 2090 on the S&P. If that happens, we would be looking for a washout to S&P 1552.

Short Bond Trade

We completed our TBT buys yesterday and ended up with an average of 16.59 on all 33 units.