Category Archives: Stock Indices

Trapped Capital

We have been warning about the risk in the stock market as we were approaching the business confidence turning point of Jan 18th, 2020.  When the news of the coronavirus breaking out in China in January, the market discounted as a China problem and continued to make a higher high in February after a brief 3% selloff. 

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Oil Price War Is Worse Than The Coronavirus

Over the weekend, Saudi Arabia engaged in the biggest oil price war with Russia that caused the oil price to drop more than 30% overnight.  The futures market has responded with the DOW dropping more than 1000 points.  If the market opens below the low of February tomorrow, the stock market selloff will intensify.

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V or U Shaped Recovery?

All three major indices lost more than 10% last week.  On last Thursday we saw a 1190-point fall for the DOW.  The pressure is high for the Fed to cut interest rates to rescue the stock market.  This is the longest bull market in history, the investors have been conditioned to buy the dip and the Fed will take care of everything. 

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Distribution Is In Progress

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 

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SP 500 Cash Index Cycle Location 02142020

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.

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