E Market Briefing For Wednesday, April 1

Deleverage was in-the-cards before Covid-19 struck and now it occurs in a challenging and time-consuming manner, hence this tough period will not be over quickly, even as we got our projected 'Inger Bottom' pattern, as well as an extended rebound that neared 'standard deviation' resistance I outlined on a 'daily' S&P chart, and on a weekly chart in 'Daily Action'.  


So, following the January and early February distribution (Inger Top) and gradual then increasingly heavier February/March breakdown of course, we got the rebound close to the goal and that should be followed by new reality checks and realization of the limitations fiscal and monetary influences can have. This is as evidenced by further extensions as 'deer in the headlights' or stunned-sobriety expanded and which grows across the globe evidently, in 'rotational' ways as 'under-equipped' nations may likely encounter what can become social breakdowns far worse than the challenges here or in Europe, much less central banks in much of Asia and Africa that simply can't cope at all. In Latin America it varies, but you have 'deniers' like Brazil which for sure makes that more challenging.  

So yes, the path of the virus, and the percentage of fatalities may be fairly predictable now, but the 'way-out' is only just being grasped. (And that in our view has always been near-universal testing and segmenting 'who' is able to return to work. It will be tougher to contain retail shoppers and so on, but you can mandate wearing masks.)  

I have argued the three keys to this as you know (but a brief reminder for new members): 1) universal testing to give some intelligence contrasted to the slipshod way estimates around the country have been made; 2) universal requirements to wear masks (that was the special highlight last night); as well as 3) proving that the (now experimentally-approved) antiviral or anti malarial drugs (such as hydroxy-chloroquine I'd written of for 2 months, normally taken at a crucial time of symptoms but before hospitalization 'if' closely monitored for cardiac-related problems... consider carefully if that becomes a prospect) have reasonable efficacy.

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