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Wednesday, March 18, 2020

Market Update 3/18/2020 - Bullish Signals

Investors continue to freak out over coronavirus expectations, and that's going to continue, as long as the negative news cycle continues, but all my sentiment indicators have turned bullish, and market is extremely oversold. As some point the market overshoots to the downside, or you reach the point of selling exhaustion, and it looks like we're there.

I tried to warn folks over the past several months that, "something bad was about to happen", and that the entire rally, since the Plunge Protection Team was called in, at the end of 2018, was a head fake rally, and dumb (Fast) money chasing a dream.

A rare "Running flat", or common Expending Flat corrective pattern:

This is where you want to put money to work, after a nasty pullback, at maximum fear

I had a major chart malfunction in the middle of this pullback, but getting caught back up to speed.

The bullish long term trend remains intact, and there's a good possibility that this is a very bullish pull back in wave 2, as seen on the $NYSE chart, which I pinned to my twitter page yesterday afternoon.

$NYSE: Likely pullback in to a bullish primary wave (2)

Big Tech: $NDX

The only index that really matters is the NASDAQ, because that's where the bubble is forming.
Trend remains up.

I was actually expecting a real crash, to 4400 on the NASDAQ, societal meltdown, civil war, or even a nuclear war with Russia, and that's still on the table, some time in the future, but is looks like the US zombie companies, will continue to be bailed out.

$SPX Also trending up in a bull market. As high as the $VIX is, you would think it was trading below 1500. lol Bottom of the range looks like 2300 - 2350? Not a big deal.

Energy is ridiculously oversold at this point. I think it's the longest 1 month candle I've ever seen.
 Is wind and solar replacing fossil fuels? I suppose we could see the combustion engine banned; I can't imaging what else markets are pricing in.

Airlines also oversold below the bottom of a very bearish down-turned channel.

It's like the tale of 2 markets: 1. A continuing rally lead mostly by big tech, and biotech, and a few other names. 2. A continuing bear market in Energy, and the rest of the world - PIIGS & JAPAN, etc. This is why Germany is getting hit so hard.

$INDU: Could maybe hit 19,000, but 1000 points on the DOW is nothing at these $VIX levels.
As long as Tech doesn't crash, then no worries.

Stocks Rise in the Spring.

Good luck, Traders

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