Its clear that coronavirus will have a significant impact on US life, and as a result the US stock market. Due to the fed acting as a support buyer, there is now a ground floor for markets. However, the fed will not prop up failing businesses, rather it will act as a last buyer so we don't see a financial system collapse. This means that while the fed is injecting trillions in the market, they will not step in to save dying equities.
Supports are in green, Resistances are in red. The red area is the timeline where America is expected to suffer the most from Covid-19, data can be seen from here: covid19.healthdata.org/
Arrows denote where I expect the price to go, GIVEN a break through resistance or support, not predictions of direction of stock. Yellow arrows show sideways action until the coronavirus begins to impact.
Important dates
April 15 - Estimated peak resource use for the US. I'm expecting Americans to become frightened after seeing what will happen in New York, From this point on stricter lock downs and travel restrictions will constrain the economy more.
Apr 22 - May 6 - This three week stretch contains the majority of Q1 earning reports. Seeing the statistics on the impact of the virus will determine the direction of the market. As well if credit ratings decrease significantly out of investment grade, the high yield market will crash. (I can supply more info about that)
Supports are in green, Resistances are in red. The red area is the timeline where America is expected to suffer the most from Covid-19, data can be seen from here: covid19.healthdata.org/
Arrows denote where I expect the price to go, GIVEN a break through resistance or support, not predictions of direction of stock. Yellow arrows show sideways action until the coronavirus begins to impact.
Important dates
April 15 - Estimated peak resource use for the US. I'm expecting Americans to become frightened after seeing what will happen in New York, From this point on stricter lock downs and travel restrictions will constrain the economy more.
Apr 22 - May 6 - This three week stretch contains the majority of Q1 earning reports. Seeing the statistics on the impact of the virus will determine the direction of the market. As well if credit ratings decrease significantly out of investment grade, the high yield market will crash. (I can supply more info about that)
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If we use the median time for the next test of low, then we should see a drop about 28 days after the peak of the dead cat bounce. 28 days after march 26th is apr 23. obviously this is just a rough estimate, a ball park figure to confirm our initial guess based on coronavirus case load. In general our Range is Apr 9 - May 6th, if the economy is strong with economic data released then a quick recovery should be expected.
I should note that companies can delay their SEC filings by 45 days. This can be a potential road block in our idea because without economic data, the severity of the recession can't be known, and institutions will continue to hold risky assets.
We'll see, until then stay strong.