Weekly Perspectives: The Fastest Bear Market Ever

Weekly Market Outlook For March 16 – 20 – May We Live In Interesting Times
March 14, 2020
Weekly Market Outlook For March 23- 27 – Putting The Market Volatility Into Historical Context
March 21, 2020
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Hi traders,

Here is your weekly newsletter — perspectives on trading and financial markets.

Click here for last week’s edition.

 

Update On This Month’s Meetup

Like many of you, we are closely monitoring the news related to the Coronavirus.

While we haven’t yet canceled this month’s Meetup we are closely monitoring the situation and will make the final go-no-go decision next week.

You may choose to cancel your RSVP at any time and receive a full refund by going to the reservation page or message me to receive a credit for a future meetup.

 

The Fastest Bear Market Ever


Source: Barry Ritholtz / Irrelevant Investor

 

May We Live In Interesting Times –

This week the fear of a Coronavirus pandemic finally hit home as the number of domestic incidents in the US spiked causing large scale disruptions to everything from commerce, schools and daycares, sporting events, and the day to day lives of average citizens.

What was once a foreign virus has now reached our shores and the myth that somehow North American was immune was shattered this past week.

There are significant moments in history where one can seemingly remember when and where they were during those times.

Think of the day when Ronald Reagan was shot, the Challenger crash, 9-11, and the collapse of Lehman Brothers.

For me, this past Wednesday evening was one of those moments.

I was at a restaurant having some dinner with colleagues when I noticed a television tuned in to CNN cut to President Trump’s evening address from the Oval Office.

I couldn’t hear the speech, but I could see a visibly agitated President Trump struggle to reassure his “fellow Americans” and then abruptly called for a suspension of travel from Europe to US.

We quickly checked the US futures and saw a flood of red hit the tape, as traders did what I would have been inclined to do if I was at my trading desk – SELL.

I sat there contemplating the significance of the turn of events and I couldn’t help but notice the stark contrast from just a few days prior of the rosy portrayals of the global pandemic, to now an outbreak of a “foreign virus” washing on American shores.

Moments later the headlines on CNN read that Tom Hanks and his wife had contracted the disease and that the NBA was suspending all of their season games after a player had tested positive for COVID-19.

The Coronavirus had not only reached our shores but penetrated the social fabric of our lives.

We are now at a unique moment in history without any recent precedent.

How Central Banks and governments respond to the current course of events will largely dictate how the markets react and where they go from here.

Anyone who traded during the depths of the 2007-2008 Financial Crisis can probably remember the ominous feeling that there was no-one at the helm of the ship and that all hope had been lost.

We are not at that level of pessimism yet but it shows you that there is possibly more to come.

In this week’s video, I discuss how far the selling has taken us and why all assets often trade in correlation during market sell-offs.

 

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 16 – 20, 2020.

 

Almost All Crypto Projects Will Fail and Go To Zero – 

This past week the only asset class that fared worst than equities were cryptocurrencies.  

While I actively trade the crypto markets, the ongoing joke between myself and some other cryptocurrency traders is that 90% of the cryptos that we actively trade-in will likely go to 0.     

If you ever wanted to see just how dysfunctional some of these crypto projects are and how far removed they are from actually delivering on all the promised blockchain hype then check out this article from The Startup titled, I Worked Full Time in Crypto for Two Years and Didn’t Really Like What I Saw.

This week was once again a stark reminder to never get too enamored with the vehicle you are trading. 

 

Weekly Perspectives: The Fastest Bear Market Ever

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