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Adam Montana Weekly 26 Feb 2020


Adam Montana
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Several weeks ago I felt the corona virus had the possibility to hurt the stock market.  I also said I didn’t like the market which was at all time highs.  I stated that if the virus starts spreading the market would probably sell off rather quick, like a falling knife.  Well, it’s been a rough week for the markets and yes, markets don’t go straight up forever.  The Corona virus is now in 40 countries and is a very dangerous situation.  For this reason I am treading very carefully and don’t care to buy the dips or try to catch a falling knife.  This sell off feels more like 2011, 2008, or after 9/11/01.

 

I’ve talked to a number of my friends who are very smart traders and investors and many of them are saying the same thing, “ how do we invest in a market when we don’t know what this corona virus is going to do if it gets going in the USA?”  The statement I heard several times was, “This will be a great buying opportunity but I’m not going to be the the first one in”.   I agree.  This will be a great opportunity and I’m getting my buy list together.  

 

In the short term I’m expecting a short relief rally ( sucker rally) and then a resumption of the new trend, which is down.  We are now in a corrective market.  If you have your retirement money in a 401k and are getting worried you need to understand markets correct every now and then.  We are only a week away from all time highs and only 8% off those all time highs on the S&P.  Several weeks ago I suggested that you shouldn’t get too excited until the Price of the S&P breaks the 50 daily moving average, the 100 dma, and then the 200 dma.  If you look at the chart below you can see how spooked the market is now.  We have broken the 50 and 100 dma but not the 200.  We also have not had the 50 ma cross down over the 100 or the 200 ma.  So try not to worry too much but watch the news and watch this chart for those cross overs.  If you get too concerned call your financial person.  I’m sure they can give you more pertinent information and guidance.  

 

If you look look at the chart below you will see the RSI at the top of the chart is getting into oversold territory and the MACD is getting there as well.  The major indices have been down 5 days in a row.  Hopefully after President Trump’s Press Conference today the markets calm down some and we get that relief rally.  For those that are interested, a few companies that are fast tracking vaccines and drugs to fight this virus are, 

MRNA, GILD, REGN, and APT which makes face masks.  All are up considerably the last few days so don’t go buying em tomorrow.  Wait for a pull back.  

 

I am giving the board this information based on my years of trading experience.  I am not your financial advisor and as always do your own due diligence.  I am writing this post to hopefully alleviate your concerns and what to look for in the coming days, weeks, and months.  I am Day Trading what I’m seeing but not starting any new Swing trades or Investment Longs at this time.    Good luck and be patient in your

trading /Investing. 

 

081E66BC-FF32-458E-A807-87DB4F33E5D4.thumb.jpeg.9179351bd643845049c718adee1ea296.jpeg 

 

 

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