S&P Correction Wave in progress
Обновлено
While we have already seen a 33% correction in the S&P from the top of the market. There is a lot more downside in the cards still yet to come. We can see that if we begin this next corrective wave that we will see it reach a bottom some time in mid may, which would correspond well to the jobs report that comes out the first friday of the month.
Technical's have little impetus right now when the economy is in shambles fundamentally. Even so, if we are indeed in a corrective pattern we will be in for a lot more pain. Even if the virus peaks this week, there is little to say that the economy will recover soon. Best estimates from CFA's put the economy recovering Q4 of this year. What happens to valuations of companies if they don't make money this year at all? It means they are very over valued at these levels.
We can look at some fundamentals as to why the stock market will continue down lower:
The Weekly Economic Index is down at 2008 recession levels.
Unemployment claims are up to 10 million. With more coming its estimated that we could already be at a 12-13% unemployment level which is unprecedented.
Estimates for this point on April payrolls is upwards of 10 million people losing jobs.
There is a demand problem with everyone being at home. While there could be this "pent up" demand once people start returning to normal I find that unlikely. Most money will be used to pay down debts, pay rent/mortgage or just simply survive. We have seen this virus impact every single sector there is. Don't be surprised if we move much further and deeper down.
Stay safe,
-Sherem
Technical's have little impetus right now when the economy is in shambles fundamentally. Even so, if we are indeed in a corrective pattern we will be in for a lot more pain. Even if the virus peaks this week, there is little to say that the economy will recover soon. Best estimates from CFA's put the economy recovering Q4 of this year. What happens to valuations of companies if they don't make money this year at all? It means they are very over valued at these levels.
We can look at some fundamentals as to why the stock market will continue down lower:
The Weekly Economic Index is down at 2008 recession levels.
Unemployment claims are up to 10 million. With more coming its estimated that we could already be at a 12-13% unemployment level which is unprecedented.
Estimates for this point on April payrolls is upwards of 10 million people losing jobs.
There is a demand problem with everyone being at home. While there could be this "pent up" demand once people start returning to normal I find that unlikely. Most money will be used to pay down debts, pay rent/mortgage or just simply survive. We have seen this virus impact every single sector there is. Don't be surprised if we move much further and deeper down.
Stay safe,
-Sherem
Заметка
Right around our B point here and now we have formed a wedge - Заметка
While SPY has moved past our initial point B. Stocks have just gotten more expensive with earning continuing to absolutely plummet. A downturn is still in play. We have 38 million that have filed for unemployment and the market has discounted this data because the fed has turned on the liquidity machine. I find it unlikely that any type of rally is sustained from this point forward. If we adjust out B wave and look for a C target it puts our target happening closer to July or August. What's important here is that if we don't see the market fall significantly in June our bottom target moves up. In order for the S&P to go that low the market will need to start turning soon. At this point it looks like it's going to be in June when it does. SPY 160-180 area is the target at the moment
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