HGSI DOC TOP DOWN REVIEW 4.05.2020
Greetings and Welcome to This Week’s Review
The markets continued their fall last week, led by the RUT down over 7%. The good news is that the volatility of the markets seems to be calming down some although the VIX remains quite elevated, yet down from prior highs. This market feels much more like late 2008 than late 2018, and thus, I expect more pain ahead. In many ways, we are in uncharted waters. We have seen crises brought on by wars, credit bubbles, dot com bubbles, etc. This time the economic pain is self-induced by shutting down the economy related to the COVID-19 virus. No one can fault the FED nor Congress for failing to act, but IMHO is likely going to be good news on COVID-19 that turns the markets not more QE and negative rates. There must be an economy to stimulate. The next two weeks should be challenging as peak deaths in the US are likely to occur, but perhaps a positive surprise there might be a cause for at least a short term rally. Remember, cash Is a position.
Is the market done going down, and are we set up for a V bottom recovery? My guess is no, and that there is a risk not only of a retest of the recent lows but the potential for another significant leg down.
Please join me on my Top Down Review, where I identify some potential shorts and longs for the coming week.
From a personal standpoint, I hope you are healthy and avoiding COVID-19. This is not the regular flu. As a physician, I am acutely aware of the seriousness of the virus, how contagious it is, and how dangerous it is for patients and healthcare workers. We are hunkering down at home and practice social distancing.
Be safe and healthy.
The best quality video will be from my DROPBOX download.