MARCH 20 (EVENING) – I had thought the markets had calmed down and it wasn’t much of a week. Then I read this was one of the worst weeks since 2008. I thought last week was. Or the week before that.
I don’t have much to add to my lengthy post two evenings ago.
New lows should be set next week. The question is will we have the largest declines to date – which would see more 3000 point down days. Or will this be a moderate decline. It is tough to see the DOW taking on another 3000 point down day or two. But, …..
In trying to fine tune a range for a bottom, nothing has changed the 14,400 to 18,400 figures. But, 15,500-15,700 is now looking good for a more precise bottom. As I said initially, I think the low will be towards the bottom of the range. I just can’t see us having an intermediate term bottom above 17,000.
The subsequent rally should return to the 21,000 area. I didn’t think much about that, but then I realized that could be a 40%-50% rally. I guess that isn’t something to sneeze at.
But, first let’s get down to the bottom.
VOO did have -$1.3 Billion this week. So, it moved to the outflow list. But, for the week investors poured over $6 Billion into stock ETFs. This is insanity as the market crashes. When tens of billions of dollars of funds are being taken out of stock ETFs we will be nearing a bottom. We have a long way to go.
Remember, no need to be alarmed about the number of China Virus cases soaring for the next 4 weeks. Experts say the cases should peak out by the end of April. When optimism kicks in at the cases leveling out and then declining, don’t get carried away. We are still in a major economic downturn that has only just begun.
For those looking for some perspective re the virus. Wuhan had its first case on November 17th. This week no new cases were reported in all of China. From nothing to nothing in 5 months. I forget when we had our first case – mid-February? 5 months gets us to July. But, we got on top of this earlier than China did and the virus doesn’t like temps above 80 degrees and Summer is coming. So, things are looking real good for the USA to be working on wrapping this virus up in May and June. Let’s hope, eh.
Regarding real estate….I have heard that renters are leaving apartments to go to rental houses. Less chance of catching the virus in a freestanding house. Also, people are recognizing what I have been screaming about for decades – big cities are dense and it is easy for a virus to spread to the masses. Ask the Big Apple about that! Suburbs and especially rural areas are where people need to move to. The jobs will follow. The decay in our largest cities will accelerate as crime festers, diseases run rampant, homelessness gets out of hand, taxes are too high, traffic is a nightmare, on and on.
Thanks to those that have sent me information to look at. I have found several new sources I will follow. I truly appreciate it.
We just got our first known case of the virus in Aiken today. We shall see how it plays out locally.
Learn to enjoy time at home with the family….like we used to before the internet ruined everything. Put a dent in those honey-do lists:) I know I am getting a lot done around the farm.
My next update will be Monday evening.