MY CURRENT "LONGER-TERM" VIEW OF THE BROAD STOCK MARKET (3:00 pm EDST)
When financial markets are highly volatile and that volatility is being driven by unpredictable variables such as the COVID-19 epidemic and the fear/panic accompanying it, it's very easy to get lost in short-term crashes and surges
and lose sight of the longer-term market picture. My recent updates on the broad stock market have been focusing on potential short-term reversals (up and down) so let me just make a few statements on what I feel is the long-term picture at this time.
The "crash" so far has been 38% on the DOW (from the 29,568 all-time high on Feb. 12 to the 18,213 low on March 23). The market is now rallying off that 18,213 low. This may be the start of a very significant rally into the summer and maybe even into the November election OR we may soon make another lower low and then start that significant rally. In both cases, however, I don't think the market will make new all-time highs, and I think it will turn down again before the year is over and make new lows with a loss greater than 38% (possibly MUCH greater). In other words, although we may now see a bullish short to medium-term rally in equities, the longer-term picture is still bearish, and we certainly want to watch carefully for the top of this next significant rally to sell short at that top.
This is my longer-term projection at the moment, but please note that we are in unusual times and things could change suddenly. Please follow my blog posts for regular updates and any important changes that may arise.
When financial markets are highly volatile and that volatility is being driven by unpredictable variables such as the COVID-19 epidemic and the fear/panic accompanying it, it's very easy to get lost in short-term crashes and surges
and lose sight of the longer-term market picture. My recent updates on the broad stock market have been focusing on potential short-term reversals (up and down) so let me just make a few statements on what I feel is the long-term picture at this time.
The "crash" so far has been 38% on the DOW (from the 29,568 all-time high on Feb. 12 to the 18,213 low on March 23). The market is now rallying off that 18,213 low. This may be the start of a very significant rally into the summer and maybe even into the November election OR we may soon make another lower low and then start that significant rally. In both cases, however, I don't think the market will make new all-time highs, and I think it will turn down again before the year is over and make new lows with a loss greater than 38% (possibly MUCH greater). In other words, although we may now see a bullish short to medium-term rally in equities, the longer-term picture is still bearish, and we certainly want to watch carefully for the top of this next significant rally to sell short at that top.
This is my longer-term projection at the moment, but please note that we are in unusual times and things could change suddenly. Please follow my blog posts for regular updates and any important changes that may arise.
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