Since Q4 2019 I almost put myself to sleep with the monthly SPX ‘unfinished business’ chart showing future downside objectives, let alone those I made look at it every week in NFTRH reports.
That is because the psychology is different when you are simply making a projection out ahead while assigning no actual time frame for it, which I did not other than sometime in 2020. That is different than the psych that happens when the thing is actually in motion and it’s happening at 10X the speed (at the instigation of the COVID-19 hysteria) I’d have, in my right mind, thought it would ahead of time with no knowledge of the oncoming pandemic.
Anyway, preamble aside, here’s the updated chart and sure enough, it looks like this pig is going to pull a 38% Fib shortly. The question then becomes from where will it stabilize? The 38%? The 50%, which would take back the entire bull market that Trump owns? Gulp, the 62%? I guess I should also draw in the support in the 1500s, but I am trying to stay within my perception of reason for now.
I don’t like that monthly RSI is hanging there between the 50 level and the 30 level. It feels unresolved. There will likely be bounces, big ones. But the longer the process goes of dealing with the crisis (exogenous turning economic and financial) in an open ended way, the more we might expect the correction to grind on.
For now though, the cold ‘unfinished business?’ chart has not even tested the 38% Fib and it was only a matter of time. COVID-19 just happens to be the accelerant.
Listen folks, I am a human. I just play a newsletter writer and chart nerd on TeeVee. The NHL season just got suspended, my daughter’s school in New York (she’s still living in the hot zone, although dad wants her to come home) will go 100% online for the remainder of the semester, my wife’s company just sent them all home to work remotely for at least the rest of March. I should probably go to the supermarket, but from what I hear it’s gonna be a zoo.
But here is the thing. Speaking personally, 9/11 and Armageddon ’08 were more troubling to my gut than this. It’s a big time event with big time implications but we will get through it. Health-wise and if the lunatics who’ve been waiting for this moment to arrive for decades do not have their way, financially as well. I don’t know about that pig up above. But life and markets will go on. I would advise that people not fall for those selling fear right now.
Finally, I wish you all the best in your preparations and best practices. We’ll get through this event and maybe even get some playoff hockey if we’re lucky! Take care.
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