I don't know if we're going to have another try at a bounce today, but as of this posting, the futures are sitting right around -35. This movement thus far is reminiscent of the down moves back in Oct 2018 (see down arrow). If we break through that long term support line, then we're gonna see more downside and then it may move sideways for a while as the markets try to determine the effects of the coronavirus on the outlook of the economy. If we get a significant outbreak in the US or in Japan, i think this continues til the middle of 2020. If we see containment in Asia and falling off of new cases, then we may see a rally. But the longer term implication and effect on the global economy by then may determine the course of where the markets move after a sideways chop.
Also keep in mind that this is an election year for the US. Usually, election years are good for the markets (as are years where we have virus outbreaks), so who knows. Also keep in mind that we're long on the tooth of the market cycle and we may be due for a serious correction. Downside bias near term, but TBD.
Also keep in mind that this is an election year for the US. Usually, election years are good for the markets (as are years where we have virus outbreaks), so who knows. Also keep in mind that we're long on the tooth of the market cycle and we may be due for a serious correction. Downside bias near term, but TBD.