This past week the markets continued to crater lower as new government stimulus packages and central bank interventions were met with a fresh round of sellers.
What appeared to be some hopeful news came out last Sunday evening as the US Fed unveiled a surprise rate cut as well as a new asset buyback program – don’t call it QE – and caused futures markets to trade limit up.
However by Monday morning’s trading session traders quickly reversed course and took the futures markets limit down with the equities market opening limit down causing the circuit breakers to trigger for the second Monday in a row.
Clearly, the markets are pricing in a deep and painful economic downturn and the governments and central banks of the world will need to come back with even bigger stimulus packages and throw everything and the kitchen sink to try to stave off a global recession and possibly depression.
For the past decade, the bull markets have conditioned investors and traders to buy the dips however as I mentioned in last week’s video – a telltale sign of a bear market is that rips/rallies will be met with strong selling – STFR.
The S&P 500 is now trading below 2018’s lows while the TSX is even worst breaking below 2013’s lows.
The steep selloff has a lot of financial commentators describing the historic volatility of the current markets so in this week’s video I share one method (see the Tradingview script below) of tracking and comparing price volatility which provides a useful understanding of the price volatility across asset classes.
Now watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching as well as the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD MGC BTCUSD EEM and more for the week of Weekly Market Outlook For – March 23 – 27, 2020.
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TradingView Average Daily Ratio Study
study(title=”Average Daily Ratio”, shorttitle=”ADR Ratio”, overlay=true)
prd = input(10, minval=1)
daily_low = security(syminfo.tickerid, ‘D’, low)
daily_high = security(syminfo.tickerid, ‘D’, high)
MA = sma(close, prd)
adr = sma(daily_high – daily_low, prd) / MA * 100
//plotchar(adr, char=”, location=location.top)