The S-Curve, Once More, with Feeling

Photo Credit: Lars Plougmann || Indeed, this seems like a race, and the S-Curve is a major challenge to drive through

This will be brief because I am still working on it, but it is my weak conviction that as far as the markets are concerned, the COVID crisis will largely be over by next Friday. How certain am I? Not very — I give it a probability value of around 30%.

If my thesis is correct, reported new cases of COVID-19 in the US will peak by Friday of this week and will be 90% complete by next Friday. I will be watching how many new cases are reported. New cases tend to peak when total cases increase at a mid-teens percentage rate over the prior day. Because reporting is noisy, you don’t see that so easily, but the inverse logistic curves I am estimating are consistent on that figure for all the countries I have modeled so far.

I’ve run models for South Korea and Italy as well, and I’ll run them for a few more countries tomorrow. They are all pretty consistent with each other. Italy’s new cases should peak tomorrow if they haven’t already.

I know everything is dark and gloomy now. Even if my modeling is wrong, which is a significant likelihood (I am extrapolating), I find it difficult to believe that we will still be in crisis mode by tax day.

So, cheer up. The number of COVID-19 cases is unlikely to be overwhelming, and we are all likely to survive this. The markets will revive, though maybe not energy stocks for six months. Those are a separate issue.

And if new cases track my estimates, I will put more money into the market. That’s all for now.