by K E Stone
There is finally enough new data to further understand the spread of the coronavirus (COVID-19), from Wuhan, China, where the disease started, to 150 countries worldwide and counting. The communists did a number on all of us. Initially, only China data is available which you know is lies but now we have data from our friends across the pond in Italy which is more trustworthy. Reference Keystone's prior article on the spread of the coronavirus for more study and information linked here; US Coronavirus (COVID-19) Infections Chart 3/15/20.
The Keystone Speculator Coronavirus (COVID-19) Infection Rate Model now blends the China and Italy data to hep project the path ahead for the United States. Here are the data sets;
China
1/22/20 Begin
2/6/20 Rate of Change of Daily Cases Levels Off (2/2/20 thru 2/10/20) (15 days)
2/17/20 Number of Virus Cases Peak (Top of Bell Curve) (11 days)
4/8/20 Projected Date to Lift Wuhan City Ban of Population Movement (51 days)
Italy
2/25/20 Begin (give or take a few days)
3/21/20 Rate of Change of Daily Cases Levels Off (3/19/20 thru 3/23/20) (24 days)
3/31/20 Projected Number of Virus Cases Peak (11 days)
5/21/20 Projected Date Where Population Movement Bans are Completely Lifted (51 days)
United States
3/5/20 Begin
3/29/20 Projected Rate of Change of Daily Cases Levels Off (3/27/20 thru 3/31/20) (24 days)
4/9/20 Projected Number of Virus Cases Peak (11 days)
5/30/20 Projected Date Where Population Movement Bans are Completely Lifted (51 days)
Since we have established that Dictator Xi and his mainland cronies are corrupt liars, more emphasis is placed on the Italy data. The projected dates have obviously not occurred but are estimates on how the COVID-19 virus will roll through the planet's regions.
For China, where the Wuhan Virus (coronavirus) began, most likely at one of their two bioweapons laboratories, the city lock-down was fast. In a communist dictatorship society, that is easy to do. That quick lockdown resulted in the daily virus cases peaking in a couple weeks. Then, 11 days hence, or say a couple weeks after that, the daily cases peak which is the top of the bell curve as shown in the China chart above.
The charts are courtesy of our colleagues over at Worldometer that are doing an excellent job providing data and charts on the ongoing coronavirus tragedy. The charts are annotated by Keystone.
Italy and China do a lot of business together. In fact, most probably do not know that Europe is China's largest trading partner not the US. Thus, it makes sense that Italy got smacked hard with the virus; the Chinese and Italians have lots of daily interactions. The good news for Italy is that the daily virus cases are leveling off as the Italy chart shows. It is likely the real deal this time. Note how the data flattened out a week ago only to stab Italy in the back again with a swift rise in cases.
The United States will likely take a similar path to Italy. When the testing kicks into gear, it creates a sharp spike in the number of cases. King Donnie and the US state representatives and senators have been sleeping on the job with virus testing only now starting to ramp up to adequate levels.
So hang in there Italy!! The number of coronavirus cases in Italy should peak-out on 3/31/20; in a few days. This is the top of the bell curve (reference China chart) so things will greatly improve for the boot-shaped nation during April.
China says it will reopen the Wuhan region to free movement and allow people to get back to work on 4/8/20. Of course this date is tentative since a new outbreak would immediately change things. This is expected to occur 51 days after the peak in the number of virus cases in China. Thus, for Italy, the full unlimited movement of people and society, and things truly getting back to normal, will likely not occur until mid to late May and forward. Looking on the bright side for Italy, the light can be seen at the end of the tunnel and fortunately it is not an oncoming train. April will be a far more positive month for Italy than the Ides of March.
Now to the United States. Using the Italy data, the US daily rate of change of virus cases are projected to level off between Friday, 3/27/20 and Tuesday, 3/31/20. However, if the testing in the US remains woefully inadequate, the number of daily cases will continue to climb higher and higher. We will see how well King Donnie is doing his job over the coming days.
The toughest times for the United States are at out doorstep now for the next three weeks. If there was any time that you want to hunker down in your bunker with your honey, it is now. It would be wise to limit your movement to every extent possible since now through, say mid-April is the hot zone for the United States.
The US must show its hand in the next three or four days. If the number of daily cases do not level off as projected above, the subsequent dates will have to be right-translated. There are two key things to focus on. First, watch the daily Italy virus case data to make sure it remains flat or falls. This guarantees that Italy's bell curve will top out as month ends and will be going down the right side of the bell curve during April.
Second, watch the number of daily cases for the United States. That bar chart is at the Worldometer web site. Italy finally has reason to truly be optimistic since the cases will peak-out now and an improvement will be apparent in April. This will boost spirits in all of Europe. The UK and US can then further refine their projections for the trouble ahead.
President Trump is opining that the virus will end quicker than people think but there is no way to know what he means since he always talks in the abstract. The projection above says the United States does not get back to normal operation until June and later. If that is what Donnie has in mind, it matches the above. If the number of daily US cases continues rising due to more testing being performed, things will not return to normal in America until July or August.
As of this writing, in the US, there are over 46K people infected with the virus, 582 are dead, there will be 600 by noon time, and 300 have recovered.
The daily cases in the United States are jumping higher with 9,359 on 3/22/20 and 10,168 cases on 3/23/20. Americans hope and pray that this number will remain at 9 or 10K-ish for a day or two and then slowly drift lower. That will be fantastic news. However, if the daily cases keep climbing, the peak in daily cases will keep being pushed forward and misery will continue longer into the future.
It is comical to hear President Trump use the word "we" so much. For the last three years it was "I" and "me." Donnie told all of us, "I sent the stock market to record highs." Funny how he is not claiming credit for the epic record of the fastest stock market collapse in history and the stock market has not gained a lick since he was elected. Sadly, the news on the coronavirus will become bad over the next couple weeks so do not be surprised. This is especially obvious that the virus news will worsen since Donnie says "we." He is already trying to spread blame around as all politicians do.
The stock market is due for a relief rally and the S&P futures are running limit-up. Congress should agree to a fiscal stimulus bill and pass that perhaps today and stocks will be joyous. The public will be quick to say that stocks will come back; they are programmed that way. The real fun likely begins in a few months when we roll over into H*ll a la the 1929 crash and the Great Depression. We will have to see how far the stimulus goes and when the charts again signal the demise of the US stock market.
A word of caution. Keystone was thinking the end game would occur this year as all faith and confidence is lost in the Federal Reserve and other corrupt global central bankers. It is occurring. The thinking was that the Fed would throw the kitchen sink at the economic and market collapse at the April meeting which would result in the loss of confidence. No need to wait for then; the Federal Reserve fired all its ammunition yesterday. All faith and confidence is lost in the world's central bankers. The end game is near. Be very cautious about any long you hold for the remainder of the year.
Going forward in the near-term, stocks will likely perform a relief rally. A lot of weak hands will sell because they are afraid of losing more money and what typically happens is stocks will rally further higher at that point. Then, everyone will opine about how stocks came back like they always do and all is fine again. Whammo. That is likely when the stock market will be smacked hard and pushed down the cellar steps. Since the Fed has spent all its bullets, the day of reckoning may be coming faster. In the near-term, a healthy recovery rally may be what the doctor is temporarily ordering but the patient will become sick again once the easy money morphine wears off.
Federal Reserve Chairman Powell continues to try an paint a rosy picture for the economy before the coronavirus. Wrongo. The Retail Sales data has been dropping since December. The Fed was touting the consumer as holding up the economy; well they apparently had to set it down and stop holding it up four months ago. Everyday is another day of half-truths and baby games from the central bankers and elite class who only worship money and power. The world including the US was already slipping into recession.
The Fed saved the day last Fall with massive QE after the September liquidity event that almost took markets down. That was all phony stock gains and a great opportunity for the elite class, and smart professional stock traders, to exit, and allow Ma and Pa to hold the bag again. All the bag holdin' sucka's are opining at the water cooler, those that are able to work in this virus shutdown, discussing the -30% and -40% drubbings in their stock portfolios. Easy come, easy go. There's winners and losers every day in the Big City, sonny and girly. But do not believe that horsesh*t from the Fed that the US economy was strong before the virus; it was not.
It will be interesting if President Trump is now associated with and linked to Herbert Hoover who ushered in the Great Depression. The following two weeks likely determines not only Donnie's fate in future history books but also if he wins or loses the November election. If the number of daily cases levels off, Trump may be able to pull out a win in the long run. If America's give up hope and panics over the next couple weeks as the COVID-19 virus hits the hardest, Trump's future may be like sand falling though voter's fingers.
Airplane maker BA is enough to make you puke in crony America. Boeing fed off government handouts and subsidies for many years, receives preferential loans that common people have no access to, and bot back stock to pump the BA price higher. The wealthy elite made millions off BA stock raping it for all its worth. Management did not save a dime for a rainy day. Now, the airplane manufacturer, roiled in scandal, comes to the American taxpayer wanting a bailout. Do you understand how the crony capitalism game works in America? It is plain as day. What a filthy system.
All the jackasses on their soapboxes a month ago touting free market capitalism are now donning beggin' pads, kneeling with hands in a prayer pose, asking for bailouts, cash handouts and other government and central banker largess. What a joke it all is. This is not capitalism; it is a corrupt crony capitalism system.
The fiscal stimulus bill is held up in Congress since the democrats want more funds to help common people instead of bailouts for companies again. Republican Leader McConnell is of course on the side of big biz and wants to see more bailouts. It is comical to hear people tout a capitalism system that does not actually exist in America. Remember, one-half of Americans do not own a single share of stock; do you think these huddled masses have any sympathy at all for the folks that lost their shirt in the market over the last three weeks?
America is best described as a faux free market crony capitalism financial system. The United States is not free but instead simply more free than other nations on earth, which makes it a better place to live. The United States is rigged for the wealthy elite class since they are in the positions of power that control laws and the flows of money and funding. The upper middle class perform the bidding of the super wealthy and are complicit in cheerleading the pretend capitalism. All ism's throughout history fail in 200 or 250 years or a lot sooner. With the recession now in place in America, a class war will soon follow. If the republicans continue pushing for corporate bailouts and that type of thing, it will only exacerbate the class war.
After a decade or two of transition for the US, America will likely adopt a socialism-light type structure a la the Nordic states. This would likely be a good direction to go in since capitalism obviously failed due to human greed and non-transparency. Only the sons and daughters of wealthy folks begin businesses since they do not have to worry about failing. At least in a Nordic-style model, all people will have a fairer opportunity to pursue entrepreneurial endeavors not just the families with money.
Keep an eye on the Italy and US data and match it to the projections above.
Note Added 8:10 PM EST: King Donnie proclaims that the US will reopen for business on Easter, 4/12/20. What is he smoking? He may want to resurrect the economy but he is no Jesus. Not even Lazarus. Look at the US chart projection above. At Easter, the United States will be peaking in the number of coronavirus cases. Telling people that all is groovy on Easter would be the height of stupidity and incompetence. It is time to retreat to the bunker and pull the manhole back over the opening. The rehearsals and dry-runs are over. The next 2 and 3 weeks are going to be the worst period in the US for the coronavirus outbreak. If you do not have to go anyway, it would be very smart to stay at home and take a chill pill. America will know how bad the virus will attack the States over the coming days. Wall Street sets records in the up direction for a change printing the strongest upside point gains in history. The SPX gains 210 points, +9.4%, to 2447. The Dow gains 2,113 points, +11.4%, to 20705. Keystone's proprietary trading robot, Keybot the Quant, remains short from 2815 on 3/11/20. Humorously, Congress continues fighting over the fiscal stimulus bill as the gamblers play on Wall Street (Kenny Rogers, The Gambler, croaked the other day). The markets expect a brand new shiny and strong pony to be delivered to the NYSE tomorrow. If instead an old donkey with a sunken back shows up, there will be H*ll to pay. Society has been programmed to constantly think optimistically for the last two or three decades. If you ever say a negative comment, you will be immediately shamed into blindly speaking happy talk. Hence, the level of continued optimism in the stock market is comical. Everybody and his brother expect a solid recovery in stocks and tout the same standard line that in the long run stocks always go up. Daryl and his other brother Daryl may be in for a rude surprise not only this year but moving forward many years.
Note Added 4:49 AM EST on Wednesday, 3/25/20: Congress agrees on a fiscal spending bill. The exact details will be known today. Futures are mixed overnight. When the deal is announced, futures are actually flat and uninspired. Yesterday's rally was record-setting. The spending bill is $2 trillion but yesterday a $2.5 trillion number was bandied about. The boneheads inside the beltway must have played hooky the day they taught the expectations game at school. Just as the earnings bar is kept low so the company can easily step over, or the performer that begins by downplaying his ability and then knocking your socks off, you always want to under-promise and over-deliver. This is how you become a hero in life. The republocrat and demopublican hacks flunk the expectations game. If they were talking $2.5 trillion, then that or $3 trillion (which are ridiculous numbers), would be expected; instead the final number is $2 trillion which feels deflating while humorously the trillion in bailouts represents the collapse of crony capitalism in America. S&P futures are at their highs currently this morning up +44 points, +1.8% so the agreement on the bill is creating some positivity. King Donnie appears on Fox News last evening proclaiming that the stock market will return to its record highs. He must still be smoking whatever he is smoking each day. The SPX (S&P 500; the US stock market) falls from 3394 to 2192, a 1202 point drop, a -35.4% crash in only 24 trading days; it is an epic and historic stock market crash and will be discussed in college classrooms for decades to come. Donnie will be in the record books forever with this catastrophic market failure. Making back over 1200 points is a formidable task and would require a percentage gain of +55% for stocks. As they say in Brooklyn, "Good luck wit dat." King Donnie is opining about relaxing the restrictions on 'social-distancing' and wants families to be out and about on Easter. This is stupid talk. The United States will be mired in coronavirus problems in early April but Donnie wants that made-for-tv image that everything comes together for a happy joyous ending on Easter. It is delusional and troublesome that the leader of the Free World is more concerned about the wealthy losing money in the stock market and the creation of a happy Easter ending to the COVID-19 pandemic rather than focusing on the real and escalating problem of getting more gowns, masks, and protection equipment to the healthcare workers dealing with an increasing number of virus-infected humans. The EOM and EOQ1 occurs next Tuesday so there are only five trading days remaining in the month and first quarter. When a month moves strongly in one direction, stocks then typically finish the last two or three days of the month in the opposite direction. March is obviously a crash month all down from start to present, thus, some buoyancy would be expected to end the month. Perhaps stocks chop sideways to sideways higher from here into April, or, a pullback may occur in the back half of this week as the fiscal stimulus deal is analyzed, which likely would set up a rally for the last couple days next week to finish-out the horrendous month and quarter for long traders. Conversely, short-sellers are dancing in the streets; the stock market crash was glorious and beautiful. All of you knew it was coming as Keystone explained in detail with charts and technical analysis since December. If you did not prepare, well, you screwed-up.
Note Added 6:37 AM EST on Thursday, 3/26/20: Italy is on track to peak out in the active COVID-19 cases in the days ahead. Hang in there Italy! The booted-nation is about to start kicking back so do not give up now! The daily cases in Italy are now flat for seven, almost eight consecutive days; this is fantastic news since it tells you that the active cases in Italy will peak out in the days ahead (the peak of the bell curve occurs on the active cases chart and the cases will then begin decreasing). Medical folks need to hang in there since you will notice things improving within a week or two. The news is not so good for the land of the bullfights (Spain) and for the shining city on the hill (America). Spain is currently being thrown into the heart of the coronavirus fire. Spain is feeling pain with the number of daily cases continuing to ramp higher, like the United States, so the top of the bell curve for active cases is nowhere in sight and likely at least two to three weeks away for both Spain and America. These two nations are now kindred spirits, holding hands, and walking into the valley of covid death together. The virus situation will become worse in the days ahead. No person at peace in their mind, heart and soul ever fears evil.
by K E Stone
The Keystone Speculator, the only Wall Street analyst that accurately predicted and explained the stock market topping process in real-time during December, January and February, weighs in on the projected path of the coronavirus, now called COVID-19. The chart displays the number of coronavirus infections in the United States up through the 3/14/20 and 3/15/20 weekend although today, Sunday, 3/15/20, the Ides of March, the infection count may sneak above 3K. The CDC and Washington state identify the first US coronavirus infection and patient on 1/20/20. Here is the infection data thus far for America.
Date; US Infections; US Dead
2/29/20; 30; 3
3/2/20; 110; 6
3/4/20; 150; 11
3/7/20; 333; 17
3/10/20; 1020; 28
3/11/20; 1050; 32
3/13/20; 1800; 44
3/14/20; 2240; 50
3/15/20; 2930; 60 (revised several times today up to 3300+ and 62 deaths)
As of today in the United States, there are 2,930 people infected with COVID-19 and 60 have died (some statistics say 2800+). Worldwide, there are 160,000 people infected with the virus and 5,850 have perished. 76K have recovered. The good news is that one-half of the people that have been infected with the virus have already recovered. The bad news is that 3.666% of the people that are infected with the coronavirus will die (3 or 4 out of every 100 people; or 1 in about every 30 or 40 people that get the virus will die. These unfortunate souls are mainly folks in advanced years with ongoing health problems especially respiratory afflictions such as pneumonia.
It is a fool's errand to explore all the potential outcomes going forward; let the cable news hysteria take care of that. Instead, the chart above curve-fits the Wuhan, China, data to the United States. Wuhan, a city of 11 million, is ground-zero for the virus. Initial news reports speak nonsense saying the virus began after a man ate a snake that had ate a bat. This Dr Seuss tale has no merit. Conversely, applying Occam's Razor, knowing that there are two biological weapon's laboratories in Wuhan where the virus started, you do not have to be an Einstein to figure out what happened.
Using a starting date of 1/19/20 for the Wuhan, China, fiasco, 16 days later, on 2/4/20, the daily pace of confirmed coronavirus cases slowed. 14 days after that, which is 30 days from the initial timeline date, on 2/18/20, the number of virus infection cases peaked. This is the top of the so-called bell curve for any of you that are STEM-oriented and studying charts and graphs. A country, region or society can breathe a sigh of relief once the number of infection cases peak knowing the worst is over. In Wuhan, the infections appear to top out at 80K-ish, thus, about 1 in every 140 people in this Chinese ground zero region contracted the virus. 25 days after the peak in infectious cases, or 55 days after the initial timeline date, on 3/14/20, the infections drop to about one-sixth or one-eighth of the peak number (about 10K cases in Wuhan China compared to the peak at 60K to 80K). The worst of the COVID-19 scenario is stretched through that 55 day period; this is how long for the fiasco to run its course in China.
Since King Donny appears to be sleeping on the job, if you believe the left-leaning media in the States, the US may experience a similar path as China. Using the US base timeline day as the leap year day, Saturday, 2/29/20, the Chinese fractal would dictate that the US coronavirus mess will continue into late April early May. The chart above uses the Wuhan data and scenario to project the potential US scenario ahead. It will likely be very ugly in America over the next couple-three weeks.
The first purple star indicates where the pace of daily infectious cases should begin to subside in the US which is tomorrow (using Wuhan as a guide). Do not hold your breath. America may be heading for a disaster since the pace of the cases do not appear to be slowing at all. There is a jump of 690 cases over the last day (2930-2240); the prior day was an increase of 440 cases, and about 350 cases for each of the two days prior to that. So the number of cases were say, running at 300 to 500 per day, and you want to see this pace decrease, so obviously the big jump overnight of six hundo plus is cause for concern. But fear not, King Donny is on the job.
Humorously, although this is a deadly serious topic, the virus bug may have stuck to Teflon Don, literally, he looked sick and tired like he had the flu in the latest press conference. Nothing else has stuck to the orange-headed showman during his three years in office; it would be ironic if the virus did. Donny is tarnished by appearing incompetent in handing the coronavirus situation (the media not on his side) and at the same time he may have been infected with the virus. The Brazil team was infected as they all partied down in Mar-A-Lago last weekend and likely all these jokers traded germs as they passed the bong. President Trump was tested and the results are negative but are you actually stupid enough to think they would report otherwise?
King Donny wants to keep the coronavirus numbers low so trying to get a test for the virus is as difficult as wrestling a doughnut away from a city cop. Donny can keep the numbers low if fewer people are tested; that way when we get to the other side in a couple-three months he will brag that America had the least trouble from COVID-19 and of course it will be due to his single-handedly saving the United States (meanwhile hundreds of thousands that may be infected may never be tested). What a joke it all is. Phony two-bit hacks playing their political baby games. Comically, an NBA (basketball) team is tested immediately for the virus while poor people can not get a test if their life depended on it--and it actually does. It's simply another day of crony capitalism in corrupt America.
Trump's modus operandi (playing games with the virus numbers) is obvious. Donny better get under the covers and eat some chicken soup since his orange skin is taking on a pale greenish tint. Instead of a noble, knowledgeable and benevolent king with unwavering leadership abilities, the virus has Donny looking like the emperor that finally realizes he is not wearing any clothes.
There are 330 million people in the United States so a 1 in 140 infection rate would be about 2.4 million people. Thus, the projection of the number of virus infection cases would be anywhere from 60,000 to 2,500,000. It's a huge range but we are dealing with an unknown and only have the Wuhan data set to go by. It would be beneficial to perform the same exercise using the Italy data once the boot-shaped nation gets through its tragedy. Even if the odds of contracting the virus are 1 in 100 people, most of the US will not become ill. The worrisome aspect, however, is that America may be unprepared for this coming sh*t-storm over the next month and the cases may blow-out parabolically and exponentially to the upside. Also, the economic and market impacts will severely impact daily life for the next couple months.
The news reports do not adequately address the situation of mutations. We are all up sh*t creek without a paddle if the coronavirus begins mutating into something stronger. At that point, your only choice may be to start praying and asking for forgiveness to place your soul at peace.
The key stat to watch in the US is that daily infection number. You need to see the daily pace of the infections trail off. If the pace of infections in America do not begin to slow this week, the chart above will need to be right-translated and simply use the timeline numbers above to adjust the path forward. The peak in infectious cases will occur about 14 days after the pace of the daily cases begins to decrease.
Thus, the above chart, based on the Wuhan progression, says the pace of daily cases in the US may begin subsiding this week, which may be wishful thinking. If the pace of US cases do not decrease, simply keep watching the numbers until they do. At that point, you can project that the peak in infectious cases will occur about two weeks hence. The chart predicts that the peak in infectious cases will occur in the United State on 3/30/20, the end of the month. Again, this can right-translate depending on how the pace of cases proceed this week.
The purple star on the right side is 55 days beyond the initial starting point of the virus. At this time, the number of virus cases are coming down sharply on the other side of the bell curve and would be expected to be about one-sixth or one-eighth of the total peak cases whatever that number turns out to be and again, this will be right-translated depending on if the pace of cases slows this week in the US, or not.
The chart above likely serves as a base case where the COVID-19 situation can only become worse. Either far more infections will occur creating a taller peak, or the timeline may stretch out for multiple months taxing the medical system (America does not have enough hospital beds). To repeat again, watch the pace of daily cases since that tells you a lot about how this tragedy will proceed.
On the economic and stock market front, things will remain a mess going forward. The high volatility (VIX) guarantees that wild and huge price swings will continue intraday and day to day. Wall Street will likely become all bulled-up about two weeks after the peak in virus cases in the US which is mid-April if the above chart plays out. Thus, choppy and whipsaw markets may continue for a few weeks until the panic peak in virus cases occurs and once the professional traders see the peak occur and a couple weeks of data that show things are definitely improving and the pace of infections dropping, they will hit the buy button. Until then, more whipsaws will likely occur as the demopublican and republocrat a-holes fight over stimulus programs and the Whitehouse spews more confusing virus data and information.
It is hilarious that most Americans actually believe that a free market capitalism system exists in the United States. A week ago, the politicians, wealthy bankers and corporate executives, and other elitists, were touting the perils of socialism and how any such move towards a socialist-style government system would destroy the country. The same people are now crying for bailouts, easy-money loans, stimulus and lower rates to help their companies survive and keep stock market prices afloat (the opposite of capitalism). It's a hoot to watch. Phony fools. Keystone has explained many times that America is best described as a 'faux free market crony capitalism financial system'. The truth hurts.
The wealthy class destroyed the United States over the last five decades and is why democratic presidential candidate Bernie Sanders continues to enjoy popularity. The rigged financial and economic system disproportionately advantages the wealthy class, since they control the game, at the expense of common Americans making up the lower middle class (that used to be the middle class 10 to 30 years ago). The middle class is history splitting into a smaller grouping of upper middle class individuals, that have professional jobs catering to the wealthy, and a larger lower middle class grouping where the rest of society was dumped after the Great Recession. Payback via a class war, rich versus poor, which begins after the recession starts, will be a b*tch. Be there or be square.
In these erratic markets, it is best to view your portfolio as a bar of soap realizing that the more you touch it (trade) the smaller it gets (due to whipsaw choppiness and erratic price action). Trading less is a good approach in these markets. Use the key indicators Keystone has posted many times to determine important inflection points ahead. It may be best to simply wait for that peak in virus cases to occur which should create a strong rally. Some savvy traders may become bullish once they see the daily pace of the virus cases subside.
Anyone that followed Keystone's technical analysis for the US stock market made out great during the crash. Comically, all the idiots that lost boatloads, -30% or more on some tickers, are running to the same money managers asking them what to do next, when the same financial adviser was clueless about the pending collapse in stocks. Aren't humans funny?
The current price action is similar to 9-11. The economy was sick under the surface back then but it was not reflected in the daily business commentary. 9-11 occurred and stocks cratered. 9-11 was blamed but the economy was already sick and markets needed the pullback anyways. Same dealio now.
The stock market was at epic and historic highs in February; the best rally that central banker easy money can buy. Keystone explained the stock market topping process late last year into this year. Sentiment values, chart patterns, market history; Keystone explained it all and forecasted the exact top. This is a multi-month and potentially multi-year top for stocks.
Another funny thing this weekend is universally everyone saying that "stocks will bounce back" from the overpaid money manager down to the shoe shine boy and taxi driver. Sure, a significant relief rally will occur at some point, but smart traders will sell into it. Every other selloff in history results with hand-wringing and traders jumping from windows but with the advent of technology, retail investors are far more savvy. A crash occurs in stocks nowadays and everyone immediately sings, "it will bounce back" to the melody of Tomorrow. No it won't and people are stupid. The coronavirus was simply the catalyst that kicked the stock market over the cliff to get the downside ball rolling; the global economy was sick before the virus drama and remains sick now. Demand is the problem going forward. A smart trader will remain on crash watch going forward.
As Keystone has stated many times, the Federal Reserve will never be blamed for their obscene Keynesian money-printing over the last decade that only served to make the wealthy class more filthy rich. The end will cometh with a war, terrorist event or pandemic, or two of these, or all three. The pandemic wins. As recession approaches and sick stock markets occur for the next couple years, analysts and history writers will say the coronavirus destroyed a great economy. Wrong. But that is what history will write and the Fed will always remain protected. Such is the crony capitalism system.
The Whitehouse, stock market, Washington, DC, Wall Street and medical system drama over the coronavirus, COVID-19, continues. Don't forget to cough into your elbow and then use that elbow to greet someone.
Note Added 3:00 PM EST: Cable news reports that today's US COVID-19 infections are now above 3,000 with 62 deaths (Sunday, 3/15/20). The numbers may jump wildly higher this week running up that parabolic front-side of the bell curve in the chart above which would obviously ramp-up the fear and panic in society. Do you function well in chaos or are you prone to choke under pressure or even freeze-up? Clint always said a man's got to know his limitations.
Note Added 5:11 PM EST: The Federal Reserve blinks and cuts interest rates to the zero bound embracing ZIRP (zero interest rate policy). King Donny got his wish. The president has been punching Chairman Powell in the face for months telling him to cut rates and Powell finally flinches under the pressure. Comically, King Donny will be immediately crying for negative rates. You can never make a boy happy that was born with a silver spoon in his mouth. Wowza. In addition to adopting ZIRP going forward, the Fed announces a huge $700 billion QE program. What a joke of a financial system. It is party time folks. The Fed is dropping money from helicopters to help the wealthy recover their stock losses. The news is obviously timed to pump the futures markets opening within the hour at 6:00 PM EST. The expectation would be for huge upside in stocks perhaps another limit-up day? The market craziness continues as the last months and years of crony capitalism plays out.
Note Added 6:03 PM EST: US futures open surprisingly to the downside. Traders are telling the Federal Reserve that all that juice just announced was already priced-in with Friday's upside action. S&P futures are down 115 points, -4.3%. A minute later down 78 points, -2.9%. A potential crash scenario would be on the table for the week ahead. Perhaps traders and investors do not view monetary policy as an adequate tool to handle a virus. Perhaps fiscal policy is being viewed more that way as well, hence the negative futures. The week ahead promises more epic and historic price action that will be talked about for decades to come.
Note Added 6:08 PM EST (9:08 AM Monday Morning Sydney; 7:08 AM Tokyo): S&P -119 at the lows, -4.4%. US coronavirus infections are above 3300. Confidence is being lost in the central bankers. When confidence in the Fed is lost, all is lost. The near 11-year Keynesian fantasyland will then likely end in horror.
Note Added 6:16 PM EST: S&P -130 at the lows, -4.8%, tagging the limit-down trigger. Chairman Powell, in his pajamas, collapses to the foot of his bed, his head is held in his palms, he asks the Lord what he should do next. Powell sadly realizes that it is all falling apart around him.
Note Added 6:49 PM EST: Chairman Powell is conducting a press teleconference and takes journalist questions. The serious troubles with the markets and global economies become more apparent each hour. Central bankers are drenched in sweat. Powell is tap-dancing as best he can to calm the markets but the impromptu press conference via telephone, sounding like a cheap earnings conference call, is not instilling any confidence. During a question from Bloomberg TV, Powell stumbles and asks to repeat the question because he cannot read the chicken-scratch notes he wrote when the question was asked. Pause for hilarious laughter. Lord, please help us. Powell is steering the market and economic ship and cannot even read his own notes. Powell sounds like the muzzled order-taker at a McDonalds drive-through as he struggles through the con call. Powell needs to cut the call because he is confused and getting mixed-up. He will hurt markets more than help. Comically, the future of the Free World rests on Jerome Powell's thin shoulders.
Note Added Saturday, 3/21/20: The coronavirus news is not good. The stock market news is not good unless you are short. Short-sellers are in clover these days. The American sucka's worked all those hours to save that money in their investment accounts, IRA's and 401k's and one-third or more of the nest egg is toast in only a couple weeks time. The 401k is now a 201k. Do you regret listening to all the corrupt money managers and financial advisers? Oh well, those of you who did not listen to Keystone, should have. Those of you that did saved boatloads of dough. The Keystone Speculator Coronavirus Infection Rate Model above is based on the Chinese data to date but the corrupt commie government would never tell the truth if their lives depended on it. However, it is the only virus data to model thus far. The hope was that the Italy data would settle out and verify the China data but it is not. The virus is kicking the boot-shaped nation hard. A week ago, the COVID-19 cases in Italy were choppy sideways leveling off which is great news since the model projects that the total number of cases will then peak 14 days hence. But over the last three days, the Italy data spikes higher again. This is extremely bad. It means that Italy is at least two to three weeks away from the top of their bell curve (maximum number of cases) and it could be longer. Thus, the UK will not likely peak in cases for a month and the US will not peak for a month or more. As soon as the Italy daily rate of change of cases levels off, that information can be fed into the Keystone Model to help project the path ahead for the United States. The next month will be serious virus trouble in America; make sure you are ready. Look at the SPXA150R chart with a 2-handle. Go long, Mortimer. Early week may be sloppy for stocks. The new moon peaks early Tuesday morning East Coast time so stocks may be soggy from Monday afternoon into and through Tuesday; perhaps the Congress has trouble passing the spending bill or it is perceived to help businesses and the wealthy more than common people (of course it will help the wealthy more in America home of crony capitalism). The low SPXA150R tells you in a couple weeks it is very likely that stocks will be higher even if they are flushed lower early this week so do not get caught too short. Traders are playing the names long that benefit from a stay at home nation such as AMZN, NFLX, APRN, WORK, etc... Keystone is day and swing trading these days, playing the sawtooth pattern, cashing in on the up and down daily cycles. Keystone bot XLE, WORK and SSO on Friday for quickie swing trades. These trades may change in a heartbeat. Slack is an interesting long since it connects companies via internet, but more importantly, the WORK 2-hour chart shows an attractive W pattern bottom. TJX looks interesting for a long but Keystone does not own it right now; maybe buy TJX as a long flyer this week. Remember, the low SPXA150R tells you to not get caught too short and you better start nibbling and buying longs. Once the Fed's monetary and Congress's fiscal juice kicks in, stocks will likely rally for several weeks. Then more fun a few months out as stocks roll over again and then we take the big trip lower (this will serve to screw all the fools and idiots that will preach that stocks recovered and all is fine). Keystone's proprietary trading algorithm, Keybot the Quant, remains short from SPX 2815 on 3/11/20. Keystone's recession article from a year ago continues to receive huge international interest during the last year especially the last couple weeks. It was written for all you young folks that have never experienced a recession before; Clueless Millennials Must Prepare Financially, Mentally and Emotionally for the Coming Recession; A PSA (Public Service Announcement) for Millennials Explaining the Ugly Realities of Economic Recession. For the virus, simply watch the daily cases in Italy. That rate of change of daily cases in Italy must level off so the top in the bell curve and number of cases can be projected to occur two weeks later, until then, there is no hope for solving the virus dilemma.
The Keystone Speculator's proprietary trading algorithm, Keybot the Quant, whipsaws back to the short side yesterday at SPX 2815. Utilities were the final linchpin holding the equity market together and the utes took a swan dive off the cliff into the jagged rocks below (placing the crash scenario on the table). Stay alert for a whipsaw back to the long side if ECB President Lagarde delivers stimulus goodies this morning. The huge intraday and day to day price moves will continue because the VIX is above 60. The bears are in control and the beatings will continue until moral improves.
Keybot the Quant
Keybot the Quant flips to the long side at SPX 2875 at the end of the Tuesday, 3/10/20, trading session. Utilities are key. Stay alert for a potential whipsaw. The Keybot site has more information.
Keybot the Quant
