HGSI DOC Top Down Review 2.23.2020
Greetings and Welcome to This Week’s Review
The market appeared to have caught Coronavirus late in the week leading to a minor sell off on Thursday and Friday. Several of the leaders (AMZN, MSFT, AAPL, GOOG, AMD) seemed to lead the decline. Although this might represent some profit taking or perhaps some liquidation from a hedge fund getting a margin call on their TSLA short, there is also some concern that money might be coming out of growth and finding some safety in bonds and metals.
Let’s take a look from a Top Down Perspective. Clearly last weeks calls on GOLD and REITs was a good one. Now do we get more defensive or do we see a quick bounce? The news flow suggest that Coronavirus is spreading more outside China and with the rising deaths worldwide the term PANDEMIC is more prominent in the news.
Historically these shocks to the market have been limited. Medically, most Coronavirus outbreaks will abate as we go into Spring and Summer. Thus most of the historical perspective and current charts favor long term Bullish sentiment. Yet for now I am turning a bit more cautious.
Lastly do not forget the impact of coordinated international QE. I doubt central bankers will be sitting on their hands and watching the struggling recovery disappear.
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