Weekly Commentary

publication date: Aug 24, 2019

NOTE;  All posts are opinions only.  No investment advice is given.  Consult with a financial adviser and do your own due diligence before trading.
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Market Summary for Week Ending March 15, 2020

 

We are trading through historic times, with violent swings in both directions.  Fortunately, chart signals have still been generally profitable, but it took a great deal of patience to make many of last week's trades successful.  Note:  All trades were posted in REAL-TIME for subscribers at tradingideas.info.

 

On Monday, we caught a glimpse of what circuit breakers would look like on $ES_F

 

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Prices remained highly volatile all week.  Records were broken for daily price swings in both directions.  In fact, according to Bloomberg, the S&P500's average daily move of 7.2% last week was the most volatile period since 2008... and equities posted back-to-back 9% swings (down 9.5% Thursday and up 9.3% Friday) since the Great Depression.

 

By late in the week, charts were signalling a Diamond Bottom (or Double Embedded Inverse H&S pattern), and prices rose sharply in the final 2 hours.

 

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I won't spend any more time talking about what happened.  I'd rather step back and look at the longer-term charts of where we are and where we might be going.  For starters, this 60min $SPY chart has given us 2 double Sell Signals just before very sharp drops:

 

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Looking at the weekly chart from the past 3 years, we've blown through the 62% retracement of the post-Christmas Eve 2018 rally:

 

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 ... and the $VIX is at its highest level since the 2008 Great Recession.

 

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So, where do we go from here?  Violent swings like we saw last week are indicative of Bear Market action.  We well may have lower lows yet to come.  It's going to be extremely volatile, and 5-10% days will probably happen a few more times before this is done.  Keep in mind that long-term (years out), the market is heading much, much higher.  It has to, because global economies are indebted in the hundreds of trillions of dollars with unfunded liabilities, and the only way they avoid national bankruptcies will be to print their way out of debt via the stock markets.  Keep in mind that we broke records going down:  fastest move ever from ATHs to Correction Territory and fastest move ever from ATHs to Bear Market Territory.  Once this bottoms, don't be surprised to see record-fast moves back to the upside and - eventually - a return to our secular bull market.