SPX and Indices hesitating to drop? Bearish setup

2020年4月22日

Not just technically, but long term fundamentally few things changed. We are still in bearish market and this bull rally doesn't seem convincing enough to spark more liquidity into markets at this levels. Yes, we saw 0.5 fib breakout, but as soon as that happened trendline got ceased and we aim towards more bearish sentiment for last few days/week. It's not much about OIl but investors hesitating to enter the market right here. Very simple supply and demand effect playing the markets at these levels. Economies worldwide are under 'siege' for extended period already, and I beleive Corona virus was just a trigger. Recession is knocking on the doors and FEDs along with govenments and other central banks world wide can postpone it or make it look different, but it is our reality.

Inflation is falling at rapid pace, commodities are falling for extended period, but stock market still acts 'irrational' and it is question if this is sustainable. We got the drop, but it doesn't look over yet. The Chicago Fed National Activity Index (in the US plunged to -4.19 in March of 2020 from a downwardly revised 0.06 in February, reaching the lowest since January of 2009 and signals recession coming. Yield curve happened already and is quite accurate in predicting recession. So with world under lockdown (yes we can re open again, but likely virus won't go away and it will make domino effect on us) it is more expensive and risky to open eveything up just like that. And closing again, which may come will make economy suffer even more. Enormous debt increase, credit crisis and inflatonary drop can't go away just like that. I am still long term bear and I see this current levels as solid opportunity to enter positions.