The last week saw a lot of red in the markets. Scares over the coronavirus are leading the markets down. At this point, nobody has any idea how the global will be affected by this. The extent, for the moment, is a guessing game.
We are also in a world which sees a lot of news distributed. Unlike decades ago, the flow of information is quick and near instantaneous.
This means we can see the news cycle affecting sentiment.
Combine all this and we see the possibility for more downside. This is why we are seeing Fridays being red. With a 24/7 news cycle, few big money players want to own stocks over the weekend with so much uncertainty out there.
Today is no exception. In keeping with both the moves this week and the Friday norm throughout the year, we see the markets full of red.
What will the market look going into next week? Depending upon the new cycle this weekend, which is likely to be negative, we could see some red early in the week. I would expect we see a pop here at some point. This happens when markets move hard in one direction. Of course, there is a good chance it is a "dead cat bounce" (or a B Wave for EW fans).
Some of the talking heads on television are already starting to talk about scaling into the market with some strong stocks that people have long term plans on. It is always smart to have a plan when entering times like these. If played right, these can be opportunities that make a lot of money.
Naturally, if we see this go from a 15%-25% pullback to 35%, that could be fatal to many accounts. In times of uncertainty, we often see people preferring cash as opposed to being active in the market. A zero return in cash is often better than a rather large draw down.
A traders axiom: live to trade again another day.
As always, none of this is financial advice.
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Posted via Steemleo