Dirty Dozen - Monday, April 27

People need to have a perceptual filter that matches the way they think. The appropriate perceptual filter for a trader has more to do with how well it fits a trader’s mental strategy, his mode of thinking and decision making, than how well it accounts for market activity. When a person gets to know any perceptual filter deeply, it helps develop his or her intuition. There’s no substitute for experience. ~ Charles Faulkner

In this week’s Dirty Dozen [CHART PACK] we look at pandemics throughout history, bombed-out earnings expectations and what indicators to track to indicate a bottom is in. Then we talk how the bull quiet regime in the SPX is being driven higher by poor sentiment, cover the new highs in gold miners and end with a dirt-cheap retailer gunning for a turnaround, plus more…

***click charts to enlarge***

1. Deutsche Bank recently published a macabre report comparing the current pandemic to all those throughout history. DB writes that “For covid-19 to become one of the 20 most severe pandemics in history on this measure, global fatalities would have to rise from the 178,000 today to just over 1 million.”

2. The long-term equity supply and demand model looks like this: Demand = money stock (cash + credit) / Supply = total market cap (number of shares + the price at which they trade). If you’d like to read more on this topic, give this post I put together a while back. This is why bears should look at the chart below and pucker up a bit. The question is will this increase in demand more than offset the inevitable increase in equity supply?

3. Bloomberg writes “As governments dedicate more than $8 trillion to fight the coronavirus pandemic, a further widening in the gap between rich and poor countries threatens to exacerbate the global economy’s pain. Wealthy nations have delved deep to cushion the blow, but many African and Latin American economies have failed to reach even a few billion dollars in fiscal aid.”

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Disclaimer: All statements are solely opinions and are for educational purposes only.

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