The Signaling is Over
The market is headed down.
2500 points down in the Dow does not necessarily mean 7500 more points down (1/3 in the first leg), but it might.
Here is our Macro Fed Influence chart, shot taken at 9:30 AM CDT. You will note that we are close to the downside breakout line but still holding above it, this has gone on for almost 3 months since August 7th, so what will happen here? Who knows based on how 2020 has played out so far. Will the market not have the breakout, maybe, but probably not. How low will it go, who knows based on how much the market is inflated, based on my work the average Nasdaq 100 stock is 20 % above support.
Some Random Thoughts at this point...
What will bring confidence back!
For the 70 percent who believe in wearing masks, the biggest deterrent is the 30 percent who won’t wear a mask and probably not get the vaccine. How can one feel safe with all the non-believers running around.
A thought, maybe idea, for the coming Biden Pandemic Act, it would seem to be important to have spot testing where whole populations are tested (maybe a township) quickly (maybe over 3 days) and periodically ( maybe every 3 months) by the CDC or some Federally sanctioned CDC affiliate in order to establish baselines for action and for public reporting.
With the pandemic real and not going away it would appear that tracing is like chasing horses after they have broken out of the barn, all you really know is how many you started with, not how many will return.
There will be a vaccine, but how long will it take to get the population 99% vaccinated.
For the economy,
First recognize that hot car sales, especially used, and suburban home sales, new and used, are a reflection of the pandemic not a reaction to deep demand or even stimulus.