Way Of The Bear Valhalla

The economy is shaky and the fright is real, but at some bespeak the bad news overloads us, and we have to start looking for the green shoots.

By HELENE MEISLER

Mar 18, 2020 | 06:00 AM EDT

Stocks quotes in this article: FDX, AAPL, JNK, HYG, LQD

Perhaps you are like me and at some point you just get tired of then much bad news. I woke upward on Tuesday morning with just that sense. I didn't want to hear anymore about school closings and restaurants and bars locking their doors. I didn't want to hear about the coronavirus counts rising (I know they still will become much worse). I didn't desire to hear nigh the stock marketplace going down. Or that credit problems are large and growing.

I had reached my limit. I just wanted skilful news. So I started searching for good news, anywhere I could detect it. I even started a hashtag on Twitter: Helenesgreenshoots.

This was one week agone. Nosotros have come a long way since then. Folks finally get it.#helenesgreenshoots https://t.co/DkAx3NJR3L
— Helene Meisler (@hmeisler) March 17, 2020

And we saw some good news. We saw the U.S. government finally get its deed together and realized the extent of this crisis. We saw new cases in Korea are down. Nosotros saw new cases in Italy are leveling off. Dare we even believe that new cases in Italy might actually brainstorm to fall now?

Afterward the close, we even saw FedEx (FDX) say Mainland china demand has rebounded more expected.

My pinned tweet says Price has a way of changing sentiment. Think about it, when the market place was at the high, and coronavirus was "over in that location," no one fretted over their health or the economy. But they should accept. Nosotros are not immune. I even noted later on Apple's (AAPL) pre-announcement in January that folks hadn't even considered that later this was over (and it will eventually exist over) perhaps people wouldn't want a new iPhone or might not be able to afford one. No one cared. Why? Considering Apple (and the Southward&P 500) were trading at the highs.

Now that prices take fallen and the economy is shaky, we hear exactly those concerns. Merely at some signal the bad news gets to be too much. At some point at that place volition be incremental skilful news and we must bound on that, considering otherwise we'll transport ourselves into a spiral.

Despite the S&P falling to lower lows intraday on Tuesday, the number of stocks making new lows contracted once more. Terminal Thursday we saw ii,377 new lows. Monday we saw 2,002. Tuesday we saw this number downwardly to ane,324.

Nasdaq saw a similar occurrence. Thursday saw 2,097 new lows. Monday saw 1,937 and Tuesday saw 1,106.

This is not to say the rally was superb. It was actually pretty poor statistically. Breadth was the worst for an upward day, since this decline began. Merely the McClellan Summation Index -- which is even so heading downwardly since mid-January -- needed a internet differential of positive vii,000 advancers minus decliners to finish going downwardly terminal Thursday. Every bit of Tuesday, it requires positive 3,800. It's nevertheless a long fashion before that gets to zero, but it's a shift.

The various credit exchange-traded funds are still problematic. The SPDR Barclays Capital High Yield Bail fund (JNK) and iShares iBoxx High Yield Corporate Bond fund (HYG) closed in the light-green, but iShares IBoxx Invest Grade Corp Bond Fund (LQD) continues to plunge.

We have non seen 2 sequent up days in the Due south&P in five weeks. That's a long time. And then I'll consider Wednesday a large test for the market. If the S&P can end in the green-still a big if-that would at least alter the pattern. And then nosotros could add that to #Helenesgreenshoots.

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