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.

Not to be overlooked as promising: Favipiravir, also known brand-name as Avigan, was approved for use in Japan in 2014 and is active against a range of illnesses, including influenza strains, yellow fever, Ebola and Fuji Film of Japan, thinks it can be effective for Covid-19. In a limited trial in China, the reports tend to suggest not just recovery in 4-5 days, but 'a negative' test a week later. (Clinical trials involving 320 people in Shenzhen and in Wuhan included 35 patients receiving the drug, who appeared to test negative for coronavirus in a median of four days, compared to 11 days for the 45 who did not receive it, so encouraging.)  

Also: X-rays also showed improved lung conditions in <> 91 per cent of Shenzhen patients given the drug, compared to 62 per cent of those who did not receive it, Japanese broadcaster NHK reported. Worth noting as most Covid-19 fatalities relate to infiltrates and fluid build-ups (after patient non-response in ICU even with the assist of a ventilator). So it's a combo it seems as outlined thusly: early (but not too, early) drug treatment including both antiviral 'and' antibiotic drugs and sometimes steroids, before a more serious challenge arrives. And often no treatment at all for mild cases.     

Additionally we've mentioned Dr. David Agus in Los Angeles, who earlier leaned favorably toward hydroxy-chloriquine some days ago on CBS. In a text to those following him today, Dr. Agus writes:  

 "New data today, first randomized study of hydroxychloroquine (HCQ) versus standard medical care in China showed much quicker time to recovery, body temp recovery, improved pneumonia & cough resolution in the HCQ group. The only patients that progressed to severe illness were in the control group. While certainly not a perfect study, it is more data we can use today while we await ongoing trials."     

One you have 'drug efficacy' and the 'mortality' rates drop well below 1%, a big change happens in my thinking up to now (and continues). Masks in public and go about life within responsible guidelines, and achieve what I termed 'taking death off the table as a measurable Covid-19 prospect'.

(I realize it's not pleasant, but everyone worries about mortality, including of course myself, given I'm at that age and acknowledge a heart condition at the same time my heart is strong and everything is quite stable now. At the same time I'll be first to join others and go out for brunch or lunch .. no early bird specials as they don't really exist these days lol.. thanks ..  as to me having knowledge that drugs are actually going to work if you catch it, is enough not really to 'relegate' it to seasonal influenza risk, but as they'll say...close enough for Gov'ment work. To wit try to re-engage with 'living'.)   

In-sum: ultimately I 'do' expect the S&P (SPY) to move higher as we arrive at a point described where ('death is taken off the table'), and all that money a very cooperative Fed and incredible (however you view that) Congress is providing, somehow finds its way into equity markets.. down the road.  

In a sense lots depends on what we've outlined, while a 'time-out' OPEC+ agreement (if that occurs) would help, though it doesn't enhance demand alone of course. But it would firm 'price' and perhaps some bankruptcies, and huge Oil-patch layoffs, in yet-another key sector of American industry struggling to get through this. That impacts hedge funds and banks, who are huge lenders in that field, so it might help the Financials as well, but it requires pushing the Saudi hypocrites to worry about arms supplies, and for them not to believe they can simply turn to China for all of that, if they do not accommodate the necessity to stabilize prices there, whether they have a quid-pro-quo with Beijing or not (China wants cheap Oil, and the Saudi's might be looking for a new arms supplier, as well as lock markets up there,as well as their efforts to hold the EU distant from Russian Oil).  

Bottom-line: Negative data will obviously weigh on Q 1 results, and it's a perspective that the projected 'crash' discounted lots of disappointment in my view, but the S&P has come up (also as anticipated), but so much that it's probably at-risk of getting ahead of itself for at least the near-term. Oil price (OIL) firming, by any chance, can actually be a catalyst to help the S&P in a broader sense than Oils, Financials or other lenders, if it does rebound.