Don’t be a Hero
By Bennett Tindle February 27, 2020
The move lower in US and global markets over the past week may seem frightening, but if you’ll recall our triangle count from October of last year, it’s exactly what we were expecting then. From 2894 we were projecting a rally into 3300, and more specifically 3314. We printed 3393, just 79 points over our projection and have since begun a motive impulsive 5 wave decline to the downside. Our most recent analysis was highlighting at the very minimum a 4th wave correction on our bullish count, which has since been invalidated. With that in mind, we still don’t see this as the start to a widespread and destructive bear market. In fact, although we are looking to short a retracement to the upside for a likely secondary move lower, we’re viewing this more importantly as a buying opportunity. Tune in below for more on where I see the markets going from here.
We’ve come full circle and are focusing once again on our triangulation count in the US markets… and for good reason! The spread of the coronavirus, and more importantly the spread of FEAR surrounding the coronavirus has resulted in a sharp decline off the highs. Although we see two distinct possibilities from a technical standpoint in the markets, our focus is once again on 4th wave consolidation.
Many have compared the coronavirus to the Flu, which I feel is a fool’s errand. Certainly, we see tens of thousands of people die every year from the Flu, but we don’t see companies closing restaurants, shops, factories and amusement parks as a result of the Flu, do we? At this point the fear of the unknown is likely the key driving force in this market. When all is said and done, we should expect a bottom-line impact to companies’ individual earnings, not to mention Global GDP, but for the time being we simply cannot quantity it. Until we have a clearer picture as to the spread of this virus, we can’t accurately forecast the economic impact it will have. Some industry groups will recover the lost revenue, but as I discussed in the video above many will not. For the time being we are content with trading the moves as they present themselves and will be sure to keep you updated as things progress.