What Do We Call This Market?

With back to back rallies to start the week, we have now rallied 23% from the March 23rd lows of 2,191.86 (for the S&P 500). Is this the start of a new bull market, or is this just a bear market rally within the broader confines of the bear market? Keep in mind that we are still roughly -20% lower off the all-time high for the S&P 500, which puts us solidly in the middle of the range.

All three major indexes triggered new green weekly Trade Triangles indicating that the overall market has moved into a sidelines trend or sideways momentum as the figures above would suggest. So where do we go from here?

Honestly, I don't have a clue, and I don't think anyone else does either, but we do have the Trade Triangles to guide the way. My inclination, if I had to guess, would be that we'll continue to see high volatility as Coronavirus news will drive this market for good or bad.

Here are a couple of things to consider:

1. This two-day rally is solely based on slightly improving Coronavirus numbers. In the U.S., the number of reported new cases appears to have fallen somewhat from their recent peak, indicating that the curve may be flattening. Italy and Spain, which are two of the hardest-hit countries, are also reporting that the number of new cases is tapering.

2. We're still a few weeks or more from opening the economy both here in the U.S. and globally. This will continue to put pressure on businesses to survive and prolongs the workforce from getting back to work.

3. And this is the big one. We have yet to see the impact that this global shutdown will have on corporate earnings. Once those numbers start rolling in, we could be in for extreme volatility, which could lead to a big mover lower.

Overall, we have a long way to go to see if this a bull market or a bear market. I'd suggest letting MarketClub and the Trade Triangles tell you what to do, that way you can sleep easy at night!

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

6 thoughts on “What Do We Call This Market?

  1. A reasonably effective treatment is about to be pronounced rallying the markets in conjunction with an agreement with Russia and Saudi Arabia to reduce oil output slightly. The second must prevail or else both Russian and Saudi governments will suffer intolerable losses in revenue which, in turn, would lead to a total collapse of their respective economies.
    Precisely when this will occur is the only question to ponder.
    As an advisor, I would advocate keeping ONLY a tiny amount of dry powder in the event the ultimate bottom has yet to be realized as "half a loaf is better than none". As an investor, I am totally committed already. That, with faith in the resiliency of one oil major, in particular, will result in good profit in the longer term either way as it currently exists in upstream, midstream, downstream in oil, gas, and solar energies with excellent credit to draw upon in the short term. Short-term gain being irrelevant to me.

  2. About currant movements found in Stocks, Gold and Oil together, I can at list say that "This is not Healthy Sign for all concerned counters." and most probably many New Comers or greedy traders will surly caught in this trap, and suffer harshly.

    One must accept and try to understand that there is Nothing either normal or positive, and at this juncture, Sharp, sudden and long lasting Financial Disaster may take it place at any time. Technical Position of Oil, Stocks and Gold is so spoiled that I will not surprised to find Single digit Oil (bellow $ 10) Three Digit Gold (bellow $ 1000) and four digit Dow (bellow 10,000) which are currently traded at around Oil @ $ 25.66, Gold @ $ 1650 and Dow @ 23230 so be cautious, focus on capital rather then profits.

    1. "Faint heart never won fair lady." . . . . Miguel Cervantes. (OR) "There's a sucker born every minute." . . . . Made famous by P.T. Barnum. . . . . . . . . . YOU BE THE JUDGE.

  3. It is simply retracement of rally and upcoming data will be disappointing and we could expect retest of recent lows as and when data is known public.

  4. Even worse, the really is triggered by our presidents brash rumor that he know of a cure!

    What is you opinion of Platinum metal, and why?

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