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.
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