Are You Recession Ready... QQQ levels to watch
Been a crazy ride but I'm back... First off... be safe out there. This virus is a real threat to society so protect yourself and beware.
While a legit threat to people around the globe, the Coronavirus scare was the catalyst the market needed to reverse its overbought conditions and trigger the much needed market corrections. I know you hear your television set saying "don't worry" or "buy the dip" or even we "are nearing the bottom".
In my opinion:
1) You don't have to worry if you have time on your side and if you don't have time on your side then you should not be in the stock market today.
2) "Buy the dip" when we get to a support zone, right now anyone buying are buying at a discount. HOWEVER, I am waiting until things go on clearance and not just on sale. "Everything Must Go" is the time to buy
3) The true bottom is a while away... Today I believe we are only about half way to the bottom
Long term expect one more solid dip, a pop in recovery because the feds interjected but not to new all time highs and then 2nd QTR earnings will be drastically down for everyone. I expect QQQ to reach the $140's by the end of the year.
What to watch:
NQ/ES future react tanked the first roughly -4.5% resulting in a halting of all trading.
To QQQ:
Based on the -4.5% move down on NQ, the White Dotted Line represents roughly where trading might open in the am. Expect a surge down to -7% or $178.88 which would trigger another market circuit breaker giving investors time to let the dust settle. This will give investors a chance to digest how the Feds contributions on Friday and over the weekend will help the economy.
1) Does this pause give time for Investors to gain confidence in the feds reaction and spur a small uptick
or
2) Does the fallout from the virus to include travel restrictions, event/sports cancellations etc contribute to further decline?
Ultimately,#2 is the likely end result.
The top solid white line is the trend line dating back to Jan 2019. That trend held solid until recent. Note: the trend line while it was pierced briefly, had a bounce from this level before fall further.
The southern solid white line represents a longer trend dating back to Aug 2015. Expect similar. Expect the price to break down near this point at $167.34 / -13% (-$25) in the coming days/weeks. The fallout of the coronavirus and all things associated with it makes me believe this will be sooner rather than later. If you are optimistic or not a believer in a further decline, this would be an objective entry for new money/dollar cost averaging.
-7% is my first target with a full expectation of target 2 being achieved soon.
Not depicted is the trend-line dating back to the bottom of the 2008/2009 market crash. This trend gives you the area I believe the market is ultimately headed by the end of the year (sum -35% to -45%).
Caution:
Just as they did Friday, the Feds will try to make every attempt to change the course of the market. I am not sure what a successful life line would be but wait for news worthy press release related to the US Economy. Secondarily, a major breakthrough in managing the Coronavirus, i.e. cure or vaccine could greatly shape how the market responds. Not expected in the near term but be prepared. Lastly, this virus supposedly doesn't survive well in warmer temperatures, so also what the weather for a significant change as we transition form winter to spring to summer.
While a legit threat to people around the globe, the Coronavirus scare was the catalyst the market needed to reverse its overbought conditions and trigger the much needed market corrections. I know you hear your television set saying "don't worry" or "buy the dip" or even we "are nearing the bottom".
In my opinion:
1) You don't have to worry if you have time on your side and if you don't have time on your side then you should not be in the stock market today.
2) "Buy the dip" when we get to a support zone, right now anyone buying are buying at a discount. HOWEVER, I am waiting until things go on clearance and not just on sale. "Everything Must Go" is the time to buy
3) The true bottom is a while away... Today I believe we are only about half way to the bottom
Long term expect one more solid dip, a pop in recovery because the feds interjected but not to new all time highs and then 2nd QTR earnings will be drastically down for everyone. I expect QQQ to reach the $140's by the end of the year.
What to watch:
NQ/ES future react tanked the first roughly -4.5% resulting in a halting of all trading.
To QQQ:
Based on the -4.5% move down on NQ, the White Dotted Line represents roughly where trading might open in the am. Expect a surge down to -7% or $178.88 which would trigger another market circuit breaker giving investors time to let the dust settle. This will give investors a chance to digest how the Feds contributions on Friday and over the weekend will help the economy.
1) Does this pause give time for Investors to gain confidence in the feds reaction and spur a small uptick
or
2) Does the fallout from the virus to include travel restrictions, event/sports cancellations etc contribute to further decline?
Ultimately,#2 is the likely end result.
The top solid white line is the trend line dating back to Jan 2019. That trend held solid until recent. Note: the trend line while it was pierced briefly, had a bounce from this level before fall further.
The southern solid white line represents a longer trend dating back to Aug 2015. Expect similar. Expect the price to break down near this point at $167.34 / -13% (-$25) in the coming days/weeks. The fallout of the coronavirus and all things associated with it makes me believe this will be sooner rather than later. If you are optimistic or not a believer in a further decline, this would be an objective entry for new money/dollar cost averaging.
-7% is my first target with a full expectation of target 2 being achieved soon.
Not depicted is the trend-line dating back to the bottom of the 2008/2009 market crash. This trend gives you the area I believe the market is ultimately headed by the end of the year (sum -35% to -45%).
Caution:
Just as they did Friday, the Feds will try to make every attempt to change the course of the market. I am not sure what a successful life line would be but wait for news worthy press release related to the US Economy. Secondarily, a major breakthrough in managing the Coronavirus, i.e. cure or vaccine could greatly shape how the market responds. Not expected in the near term but be prepared. Lastly, this virus supposedly doesn't survive well in warmer temperatures, so also what the weather for a significant change as we transition form winter to spring to summer.
