Why You’ll Want To Avoid This Bounce

My Comments: I really don’t have any right now. Just a confirmation you need to be careful with your money right now.

By Decian Fallon \ 26 MAR 2020 \ https://tinyurl.com/srdcmvp

It looks like we are in the process of the initial bounce, but it’s a bounce which typically forces ‘weak hand’ buyers to panic themselves into positions; these buyers will quickly sell when markets start to retest Monday’s lows. But, it’s a start.

We—and America in particular—are a long way from the end of the COVID rampage. When death and infection rates pick up we are going to see markets weaken and then we will be looking at lows, or maybe new lows. On the plus side, trading volume was higher in accumulation.

The S&P improvements are working against a relative performance drop against the Russell 2000. Technicals remain weak and show no divergences.

( A bunch of technical charts…)

For today, we want to see indices push beyond the recent consolidations and set up challenges for 20-day MAs and maybe 50-day MAs. This is a bounce which will establish a swing low, but it could be months before we see a meaningful rally from indices.

One thought on “Why You’ll Want To Avoid This Bounce

  1. Tony B

    But the S and P just showed a doji followed by an evening star after the bearish dark cloud cover. With the RSI at this level and the ten year in contango after a long period of backwardation, one more bullish hammer and we’ve seen the bottom. Or….you could just be broadly diversified in cheap mutual funds, rebalance…as you should have been all along…..and read a good book…..

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