3rd Monday in a Row? Another Sharp Sell-Off Looms
Updated
We will re-test the temporary bottom next week. If this fails to hold (which it likely won't hold as "the" bottom) big trouble lies ahead. Does a 13% bloodbath on Monday loom yet again? Its possible.
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It's becoming a broken record but it appears another sharp sell-off on Monday and for most of next week will hit us square in the face. For the past two Monday's I was able to forewarn investors and this appears to be the 3rd in a row.
It is likely by next week (Tuesday or Wednesday) we could see new lows. In-fact, with all the 'good news' essentially now abated - the stimulus packages done for now and the Fed already in massive QE - there will likely be nothing to prop this market up until the cases of COVID-19 subsides in terms of the current trajectory (exponential pace).
Highlights
- Likely to re-test current "temporary bottom" by early to mid-week
- 1765 is the area that could represent "the bottom" as long as cases in the US show SOME signs of peaking by the 2nd week of April (a big 'if')
- 1500 is the area that will likely be "the support" if the statement above fails to become valid
- VIX (like I said a week ago) is in Wave 5 and will likely make a new ATH to the 100-110 range
- Gold and Silver will likely sell-off for liquidity down to 1390ish and 9.5ish respectively
- zSplit
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It's becoming a broken record but it appears another sharp sell-off on Monday and for most of next week will hit us square in the face. For the past two Monday's I was able to forewarn investors and this appears to be the 3rd in a row.
It is likely by next week (Tuesday or Wednesday) we could see new lows. In-fact, with all the 'good news' essentially now abated - the stimulus packages done for now and the Fed already in massive QE - there will likely be nothing to prop this market up until the cases of COVID-19 subsides in terms of the current trajectory (exponential pace).
Highlights
- Likely to re-test current "temporary bottom" by early to mid-week
- 1765 is the area that could represent "the bottom" as long as cases in the US show SOME signs of peaking by the 2nd week of April (a big 'if')
- 1500 is the area that will likely be "the support" if the statement above fails to become valid
- VIX (like I said a week ago) is in Wave 5 and will likely make a new ATH to the 100-110 range
- Gold and Silver will likely sell-off for liquidity down to 1390ish and 9.5ish respectively
- zSplit
Comment
It appears for now (anything can change at any time) that algos may try to take the market higher for Monday (remains to be seen since volume is low). Please see my idea that I posted not long ago stating that upside potential of 2700 and 2792 is possible or a re-test near 2630 (again). While its too early to make any claims, it is still within EW theory to see 2700 and 2792. While I said it was more likely to revisit lows first, the market can trick us from time to time!
Regardless of Monday's action and what not, we will still revisit the lows as a result of the wide market gap from March 24th. Therefore, no one should be buying regardless of any algorithmic bounce. As I have said numerous types, scalping is a useful tool during these times but longs should be avoided.
The market can act irrationally in bear markets as we have seen and Monday may be another example of this if the market does finish in the green.
Again, while I don't give specific financial advice, I do not recommend longs until we see the reaction of the re-test on the market lows which should come sooner than later.
- zSplit
Comment
Once again it appears the lowest values will come over futures. Today an unexpected China rate cut on seven-day reverse repurchase agreements has occurred. The People’s Bank of China injected 50 billion yuan ($7.1 billion) into the banking system.
This only delays the inevitable re-test of the lows by a day or two. Nothing more to note here!
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