Several nations, including Thailand, Germany (of course) and India, have warned against spreading coronavirus-related misinformation on April Fools’ Day, with some countries even threatening jail time for perpetrators. Which makes me wonder: Had the same regulations applied in late February going into March, then wouldn’t many politicians and so called ‘experts’ in the West be sitting in prison right now? But heck, what do I know? I’ve only been warning about the global threat of COVID-19 since February 7th.
Yesterday’s hypothesis of an unfolding bear market rally appears to playing out thus far. However with indices having recovered about 38% the easy part of the journey is rapidly coming to an end. With bad news galore is it now time to back up the truck and load up on short positions?
Okay let’s not sugarcoat it – yesterday’s session started out with a nasty gap lower and then got even uglier from there as it failed to exhibit any buying interest whatsoever. The VIX punched into the red zone and ended up closing around the 25 mark.
True to form the financial media whipped itself into a collective bearish frenzy announcing the end of the world as we know it. Except that this time around they may actually be right as it has a global epidemic to back up its perma-death-wish. So why the heck would I be crazy enough to even think about grabbing a long position here?
Judging by the E-Mini the SPX will most likely open at new all time highs this morning. I know many of you chronic contrarians are already salivating at the chance of backing up the truck and shorting a market that has shown but little patience for any lingering bearish ambitions. So once again it’s up to me to set you straight with my renowned teutonic touch. Plus we’re going to visit some key markets and use them as a valuable exercise in reading price action.