Monthly Archives: March 2020
Crash update
“To get an idea of how far the market could drop during this crash we must zoom out and look at longer-term charts. On the 3-year chart for the S&P500 index we see that late last year the market broke out upside from a bearish Broadening Formation and then ran up, but this breakout did not negate the bearish implications of the pattern – on the contrary, what often happens after such a breakout is that the market turns and crashes down through the pattern, which is what we are starting to see now. The index is already approaching its rising 200-day moving average and if it slices through that, and more seriously then drops through the support in the 3000 area, then we are likely to see even more downside acceleration with the market plunging vertically and cratering. Note, however, that we may first see a technical bounce from the support in the 3000 zone. Once the support in the 3000 zone fails, the index will target the red lower support trendline of the Broadening Formation, which if it gets there would obviously result in catastrophic losses.”
Repost from 3-1-2020
Gold bull will extend beyond coronavirus
“A simple glance at gold’s recent performance is sufficient evidence that the metal’s price has drastically benefited from the worries swirling around global financial markets. The gold price even threatened to go parabolic until the Feb. 25 trading session, at which time profit-taking became evident. Yet gold’s price is still at a multi-year high and shows no signs of reversing its well-established long-term upward trend anytime soon. And as recent history suggests, the gold bull market which began in October 2018 will almost certainly continue beyond the coronavirus threat.”
USAGOLD note: Droke considers gold’s post-virus prospects . . . It had entered into a bull market, he says, long before COVID-19 made its appearance on the global stage.
Repost from 3-3-2020
New note: The Financial Times reports this morning that, according to an expert with China’s disease control panel, coronavirus cases in Wuhan “could drop to zero by the end of the month.” He adds, “I estimate that by the end of April except for Hubei, the rest of the country can basically take off their face masks and resume normal life.” The markets will wait for further evidence that this particular expert got it right, but this is certainly a turn for the better if true.