I have been catching up with what went on in the last hour of the regular market session (while I was out) and I just saw a news item claiming that the markets reversed on COVID-19 fears and renewed US shutdowns due to rising cases. Okay fine, VIX and other sentiment indicators covered in NFTRH 611 certainly were not standing in the way of a market correction.
But considering the bearish engulfing candles (and their tendency of a 1-2 day efficacy) on NDX, SOX, TSX-V, etc. I would not discount that this could be jittery reaction to an inflammatory news item. Apparently there was a side of US/China tension in the news as well. In 2019 that stuff consistently reset over-bullish sentiment and sustained the stock rally.
Another consideration is that the COVID stocks got hammered along with the rest of Tech. So the ‘stay at home’, ‘work at home’ play saw its wheels come off even as the headlines talk about what we already knew, the US is failing in the global COVID sweepstakes. DOCU, OKTA, RNG, TDOC, etc. all took hits. Why did the machines not buy them up? Maybe because the US market is saturated with nothing approximating value to be found (and our tracking of Growth/Value trends have been well documented, but everything needs a break on occasion).
It’s deep summer, a time I have noted over the years that volatility often comes to the markets. Today may have kicked something off with the reversal on inflammatory news an excuse to sell off. But until the Silver/Gold ratio proves it’s on a fake out I’ll just be glad to have more cash but not let undo personal bearish sentiment, especially in the precious metals and also in some global stock and commodity areas take center stage.
Okay, now I think I am done beating you up with this stuff for one day. Let’s see how the markets follow on to today’s reversals.
