I reiterate my secular bull case for the USA!
This is not the time to be bearish after a 20%, but bullish!
(Everybody waited for a pullback, but when it happens everybody is too scared to buy, that is exactly what happens now!)
2018 lows 50/50, but I do not believe in a 2008 Scenario (10% chance).
https://twitter.com/DavidTaggart/status/1237409350722838540
The Russell 2000, the weakest index of the big three was basically already at the 2018 lows, which is a good sign!
The chop from here will be painful but looking out 12-18 Months I am very bullish!
The Nasdaq is showing Relative Strength which is constructive!
The 30 Year Bond is above 65 Price / Earnings, that prices (today!!!) in a -3 to - 4% Deflationary period, that would be a -4% to â 5% hit on inflation, in my view, that is very unlikely.
https://twitter.com/crossbordercap/status/1237006307925864449 (is based on a 150 Year backtest!)
Also watch Buffets remarks on Bonds (he basically states a bond bubble!).
There are big successes in China taming (they are closing down emergency hospitals!!!) the virus, US Military just made a deal with a pharma company on a treatment drug.
Any positive news will pop the market:
The market did respond yesterday positively to good news (Trumps remarks, not being political here).
Also, we did test (almost twice!) the lows yesterday and the tape was very constructive:
Tanker stocks (!) popped big time and small cap hyper growth (pure estimates Ranking) too (when they start to track the pop, thats constructive!)
https://finance.yahoo.com/quotes/AGLE,ATTO,AXTI,CERC,CNTY,CRVS,EPIX,EVLO,HBIO,HROW,LAWS,LINX,LIQT,LMB,LMNR,MCHX,MCRB,NLNK,NNA,PHX,RCKY,SBOW,SMED,STKS,TUSK,UEPS,USAK,VIST
Also see my TA on Twitter: https://twitter.com/GfI_Himmelreich/status/1237634936032632833
Do not look at this Ceteris Paribus: There will be action (QE, Interest Rates Lowering, Deficit Spending, Treatment, Vaccine etc.) to handle this V-Crisis and the Oil Bust (US will take action to defend US Oil industry, independent who will win the election!).
Banks are much better equipped, same with households (this is the ONLY Expansion of the US where US households deleveraged!).
O.k., Corporate and Gov dept looks terrible, but this is better to handle as bank and a private overleverage (if that would be the case a 2008 scenario would be likely).
Also look at the sentiment of this board, it has never been more scared then today. Same with me! That means something, as humans we are bearish, when we should be bullish and the other way around.
If you trade money that you do not need the next 5 Years and your aim is total return, then this is not the time to hedge extensively (maybe a cheap fat tail hedge, but not for example a TLT Hedge) or to sell.
This is the time to be cool.
Best Regards
Andreas