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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

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Thursday, March 26, 2020

A "Grand Evolution" May Be Just Around The Corner

IN THE GRAND SCHEME OF THINGS


In the grand scheme of things, consider the area above current price on the following 50-year (monthly) chart of the SPX as the top of an iceberg...and the area below as its foundation beneath the surface of an ocean.

There is a fundamentally-solid foundation of (economic) support below the surface to keep the U.S. economy afloat in these turbulent times.


The volatility that we've seen the past couple of months revolving around the world-wide coronavirus pandemic will settle down at some point. It has already retreated somewhat (since it bottomed on March 16), as shown on the following SPX:VIX daily ratio chart.

The RSI is beginning to turn up, and there have been bullish crossovers on the MACD and PMO indicators, as the slowing of the recent decline and abrupt reversal of the SPX has outpaced the level of volatility over the past two weeks.

In the meantime, keep the above big picture in mind, together with the extraordinary monetary and fiscal stimulus measures, as well as health containment/mitigation measures, that are currently underway by global central bankers, world leaders, and health officials to cope with the financial, economic, and health fallout from this virus, as markets, in general, attempt to stabilize and regain some lost ground.


IN THE FINAL ANALYSIS


When the "virus dust" has settled, to a great degree, around the world, no doubt there will be an enormous amount of reassessment and restructuring by world leaders, financial experts, health officials, markets, and the manufacturing and service industries as to current methods of product development and distribution, education format, business environments, healthcare priorities and practices, monetary allocation priorities, etc.

Whether or not and to what degree life, as we knew it, will return to "normal" remains to be seen.

Exactly what and how changes can be made to improve the flow and delivery of information, education, goods and services, financial stability, and healthcare for everyone will, no doubt, be the topic by many for months to come.

"grand evolution" may be just around the corner.

A "creative visionary" would find a way to streamline, amalgamate all the moving parts, and accelerate this entire process. And, a "creative opportunist" would find a way to capitalize on this process.


N.B. Compare and contrast the SPX "iceberg" with China's Shanghai Index (SSEC), and you'll see that China's multiple attempts at rebooting their economic prowess have failed to hold for any sustained length of time since the early 2000s.

In fact, those short-term results have been, and continue to be, very erratic and volatile, as their measures become less and less effective.

Long-term major support sits at 2000, as shown on the monthly chart below.


* UPDATE March 27...