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RoboStreeet – March 12, 2020

Shock and Awe Hit Market on Virus Fears 

Equity markets are feeling the full brunt of the latest developments surrounding the Coronavirus crisis. Last night President Trump announced a travel ban on European travelers with the exception of the U.K., Ireland, Croatia, Bulgaria, Cyprus, and Romania. Markets received this news in a very negative way. The European travel ban was a shock to global stock markets. As a result, most global markets have plunged to fresh lows, despite trading being halted after a 7% decline in the first hour of trading. 

The question is whether or not this is the end of the bull cycle or just a temporary 10-30% correction. The sudden 20% drop in oil prices and 7% drop for the second straight day for the S&P means near-term support of $265 will not hold and there is a high chance that the market will drop close to the next support level, near December 2018 low (230-240).  This will take the market drop close to 20-30%.

I expect the market volatility and the three percent daily market moves to persist.  At this point, I do not believe we have set the bottom and I would wait for two days of markets to make higher highs and higher lows before the bottom can be established. The market (SPY) will trade in the range between $230 and $315 levels for the next 4 weeks. I believe the market will retest $240 level in the next 1-2 weeks.

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

The Federal Reserve acted during yesterday’s session, and the stock market got a brief pop on the news that the New York Fed is going to be implementing a massive repurchase operation. Starting yesterday, the Repo Desk will offer $1.5 trillion is staggered overnight repo operations that will run over the next two weeks. These changes, it was said, were made to address “highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.”

The aim of this move is to ensure that there are no liquidity issues in the functioning of financial markets, which in turn is intended to shore up investor confidence in that proposition. What the Fed’s repo operation isn’t going to fix, or cure is the coronavirus itself. It also isn’t going to end the “social distancing” that is becoming endemic as a measure to help curtail the spread of the coronavirus. In other words, this was a really important financial move, but it’s not a panacea.

The collapse of oil prices is also weighing heavily on the market as Saudi Arabia and Russia embarked on a full all-out price war. WTI crude is testing $30/bbl which is surely going to put some companies leveraged to higher oil prices out of business. A flight to safety in Treasuries has the 10-yr T-Note trading with a yield of 0.081% and the 30-yr T-Bond yielding 1.30%.

Within our RoboInvestor Portfolio, we are long shares of the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) that acted as a champion hedge against the downside momentum felt by all stocks. We also booked some nice profits in the SPDR Gold Shares (GLD) amidst the market’s current calamity. These are the kinds of offsets that I have at work to limit the damage from what is now become a full-blown correction. 

There will be a time in the not-too-distant future when its right to raise equity exposure and fortunately RoboInvestors have my AI tools and step-by-step instructions on what to buy and when to buy. Per my Tradespoon Seasonal Chart, I’ve already got one indicator going green and registering a “Higher” probability reading for the 50-day period. If the market finds support near-term, we’ll see other shorter-term probability periods also change from “lower” to “higher.”

The question investors have to ask at this juncture is whether they have the tools to eliminate 80%-90% of the guesswork and market risk. Join RoboInvestor today and pout the power of my AI-driven platform to work for your portfolio immediately. This is no time to go to this market alone. Our Winning Trades percentage is an amazing 86.61%, meaning we make money on roughly 9 out of every 10 trades.  

Make RoboInvestor your next trade and do it today! You’ll be glad you did tomorrow.

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.