Saturday, March 21, 2020

Elliott Wave Stock Market Update - March 21

Two weeks ago I mentioned that it was just a matter of time when all the states would be infected with the virus and unfortunately the entire mainland is now infected. The drop in prices already reflects the virus itself, what the market is not able to predict is the government response which is nothing short of a complete disaster. Today, we are just behind China and Italy in infections and looking at the numbers we will have more cases than China by the end of next week and until the government declares a nationwide lockdown, the problem is not going to go away. I am in California and we have a governor that takes this very seriously so if we get lucky, we might be able to keep to flatten the curve of infections. But what stops people coming from other less strict states from infecting us back? the whole thing is so stupid and I can't believe we are stuck with an imbecile making national decisions at this time of crisis. Which brings me to the market and why it seems likely that the sell-off will continue to extreme levels. Right now, things are so bad that it is impossible to predict when this will end so prices are probably headed towards an extreme drop like we had during the financial crisis if not worse. No monetary policy is going to stop the fall as the country will not be able to function normally until a national lockdown is in place which under the current government looks unlikely. So while we might see some counter-rallies here and there, I see prices headed towards sub-2000 fairly soon and possibly headed towards 1500 depending if the number of infected are going to be in the hundreds of thousands or in the millions. Right now, I think we will be well over 100K by the end of the month.

Stay healthy and safe!

Short Term Trend = Bearish
Medium Term Trend = Bearish
Long Term Trend = Bearish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking

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