Equity markets digested last week's dead cat bounce and closed virtually unchanged as the coronavirus takes in toll in both a rising body count and economically.
Despite the neutral close for the week, the most important indicator is a new one called the TPI (Toilet Paper Indicator) and it is still calling for a s**t storm. People are hoarding supplies and in some places toilet paper is sold out.
Until this panic flushes itself and toilet paper re-appears on shelves, markets will remain under pressure. Considering historic lows in rates, Gold could be ready to head to all-time highs.
This week’s highlights are:
- Risk Gauges are deeply in risk-off mode and worsening
- Utilities and Consumer Staples reversed last week’s selloff and regained strength (confirming risk-off)
- Growth stocks and Semi’s refuse to give up leadership which is surprising and bullish
- Big Caps firmed (DIA) on a relative basis which could be a positive if it can hold
- Brother Biotech (IBB) is holding firm and should lead when a rally occurs
- Market Internals and Sentiment are both still in risk-off mode
- Longer-term advance/decline line has broken down thru a critical trendline
- Volume is showing major institutional selling across all key benchmarks
- Volatility (VXX) exploded and held firm
- Longer-term advance/decline line has broken a critical trendline
- US Long Bonds and interest rates in general hit lifetime lows showing deep panic and concern
- Gold is at a key long-term inflection point
On a final note, if you are not comfortable relying on the TPI which is not exactly based on stats, our quant-based trading models which are based on exploitable edges have been doing outstanding with our Alpha Rotation model (without the use of leverage) up over 17% YTD, and our conservative and aggressive Alpha Options models are up 50% and 80% respectively even with a comfortable cash position of as much as 85%.
Length:00:12:41
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