What a Mess

Pricing is basically guessing at this point. A stimulus package may completely alter economic modeling as we currently know it. From loan payment deferrals to utility bill deferrals, it’s all up in the air. And that means uncertainty…

Markets hate uncertainty. And now we get to add politics to the mix, as Congress can’t seem to get a bipartisan stimulus package pulled together… yet.

Meanwhile, each state is managing their viral response independently.

In short, everything in is flux. This is not a recipe for happy markets.

Despite the fact markets are already way down it does not appear the blood-letting is subsiding yet. As of the writing of this blog the futures had hit their 5% limits. This does not bode well for Monday’s market open.

It appears the self-fulfilling prophecy have declared 2000 to be the ‘target’ for this pull-back. At this point, the technical trend for the week shows an SPX lose of about 2085.

The problem is, there are some technical indications that is not the bottom. It could be 2000… it could also be 1810… or even worse, 1713. Shall I continue? (Probably not, honestly… about 40-50% appears to be the likely downside to this thing, but we need to see how the news cycle evolves going into April. Do we see massive spikes in death rates, or does this end up being over-blown?)

Whatever the case, the set-up for this week looks pretty negative. If a strong stimulus package emerges perhaps things will shift. Otherwise, momentum remains strongly to the downside.

Downside Target appears to be 2085 for the week
Here you can see some of the more extreme downside projections

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