In our annual forecast we suggested an early year correction driven by a volatility event. On Twitter in early January, I posted that coronavirus was the most important story developing. It is now threatening the stock market and global economy. Here’s a simple way to think about volatility now.
The market is volatile. Risk is pervasive. Using simple technical tools can help you with you with your buys and sells. We are primarily position traders meaning that we seek to hold for quarters and years, not days and weeks. That is at the heart of our methodology.
I track technical analysts, including Avi Gilburt over at FATrader, Marc Chaikin, a point-and-figure guy here in Milwaukee, several candlestick makers and a few others. When their macro analysis lines up, it gives me pause. Right now, they are all telling a similar story:
The stock market is very likely to go lower from here.
The S&P 500 is hitting up against substantial resistance right now. It has been here before. And before. And before. Right now the technical indicators tell us nothing except in hindsight. Eventually one will be right and whomever was by luck of the draw pointing to that indicator at this moment, they will get to claim to be prescient. Here you can see that the S&P 500 Index 50 day […]