Since the January low, the market rallied as if the coronavius is nothing to be concerned about even with the ever increasing number of deaths and infected patients in China. Finally Apple came out warned the virus impacting the supply chain and sales in China. The reaction to Apple’s warning was muted, only
What Coronavirus that virtually has shut down the entire second largest economy in the world? It didn’t matter, the market has gone off the rails. It seems that there is nothing right now to stop the rally. The rest of the world is on life support, the US mega cap tech growth companies offer rare opportunities that provide growth and stability.
After the S&P 500 hit 50-day moving average support, it staged an impressive rally to wipe out the entire loss from the coronavirus selloff. All three indices made new highs last week. It appeared to be that the market is discounting the long lasting economic impact from the fast spreading virus.
The market made a knee-jerk low on last Monday when the cronavirus hit the wire hard over the weekend. It traded sideways for the next three days, then on Friday it took out the knee-jerk low and closed below it. This is the confirmation of the weekly cycle correction is underway.
