Quad-opex depression

US equity indexes closed powerfully lower, sp -104pts (4.3%) at 2304. Nasdaq comp' -3.8%. Dow -4.5%. The Transports settled -3.4%. Near term outlook offers a marginal lower low <sp'2280.

sp'daily5

VIX'daily3

Summary

US equities opened on a positive note, but the gains quickly faded to moderate declines. The morning saw another swing higher.

Next week's weekly jobless claims (due Thursday' 8.30am EDT) won't be pretty...

Goldman Sachs are expecting a gain in claims of around 2.25M, which would be 3x the highest ever seen. Clearly, the next ADP and BLS data due April 1st and 3rd respectively, will be equally 'historic'.

Further, GS are calling for Q2 GDP -24% (not a typo), with a Q3 rebound to +12%, and +10% in Q4. The latter are perhaps overly optimistic. Regardless, April-June is beyond 'great depression', as the US/global economy grinds to a halt.
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Meanwhile...

Ricky Sander was wheeled out onto CNBC again...
Sandler noted.... "Vegas is gonna be raging in the fall" 




Continuing with... "... but I promise you, they're going back on cruises, Royal Caribbean is going back to $100 a share"...




I will merely note, Sandler is arguably 'overly optimistic', and would agree with Josh Brown, and would "... take the other side". 

Along with an advert from Interactive Brokers offering me $10M in margin, Sandler partly inspired the following poll...

Yours truly would have absolutely picked $10M of hand sanitizer.
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The afternoon saw increasing equity weakness, as the Corona headlines just kept on coming. Despite an ugly closing hour to sp'2295, volatility cooled, with the VIX settling -8.3% at 66.04. The s/t outlook threatens further cooling under sp'2280, before finding a key s/t floor, and hyper spiking. A subsequent multi-week/month rally could be expected to 2900/3000.
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First day of spring

Moody skies, in the city of Corona

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Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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One month ago

US equity indexes closed broadly higher, sp +11pts (0.5%) at 2409. Nasdaq comp' +2.3%. Dow +0.9%. The Transports settled +1.5%. Near term outlook offers considerable chop for quad-opex.

sp'daily5

VIX'daily3

Summary

US equities opened on a weak note, but battled back upward from an early low of sp'2319, and into the mid 2400s.

Meanwhile...

CNBC's Pisani, not on the floor, of the (soon to be closed) NYSE.

As the financial networks are taking unusual measures to keep its keeps its hosts separate, we're getting a glimpse into the homes of the cheerleaders.

The afternoon saw some significant chop, but equities managed to hold onto broad gains. Volatility printed 84.26, but cooled back, the VIX settling -5.8% to 72.00. The outlook for Friday offers considerable equity chop, for what will be quadruple option expiration (QUAD-OPEX).


One month ago

Feb'19th post...
https://permabeardoomster.blogspot.com/2020/02/just-another-new-historic-high.html

Things were rather different Feb'19th. The mainstream didn't care about the Corona virus, as it was seen as just a problem for the Chinese and a few South Koreans. The equity market duly broke a new historic high of sp'3393.

Yet, we had a very long string of downside gaps to the 2900/2800s, with price action/structure similar to early 2019. All those gaps looked to be filled... sooner or later.

A mere one month later, we have global capital markets in turmoil, as the world economy has largely ground to a halt. US Q2 GDP estimates vary from a literal 'end of the world' -14%, to just a 'deeply recessionary' -3.2%. 

For now, many are calling for a V shaped recovery, helped by further rate cuts, and trillions of QE from central banks across the world.



It does appear Q2 GDP (first print will appear late July), will probably be worse than even the depths of the 2008 financial collapse.

Something few of the mainstream cheerleaders want to think about...

Say we have an (eventual) lockdown for 2-3 weeks, with an attempt to return to 'relative normalcy' in May/June. Yet then a number of secondary outbreaks occur. What then? Another lockdown? No. Then it would become a case of letting the virus just burn its way through the population until almost everyone has been infected and (largely) recovered.

It should be clear, Corona is just getting started within Europe and the USA. We have further 'interesting' times ahead.

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Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
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For details and the latest offers, see: Permabeardoomster.com

 

Midweek upset

US equity indexes closed severely lower, sp -131pts (5.2%) at 2398. Nasdaq comp' -4.7%. Dow -6.3%. The Transports settled -6.6%.

sp'daily5

VIX'daily3

Summary

US equities opened severely lower, and despite a few bounce attempts, the market completely unravelled into the afternoon, effectively in crash mode, not least within the transportation stocks, many of which were -20 to -40%.

RE: a shutdown. I expect a US shutdown of 2-3 weeks, a full month would be better. The UK could be expected to enact a lockdown before the US.

The CNBC interview...



The afternoon saw the 7% circuit breakers kick in, with price spiraling to outright crash-scale declines, with a 2pm hour low of 2280, swinging to 2409, and settling -131pts (5.2%) at 2389.

Volatility printed a new multi-decade high of 85.47, the VIX settling +0.7% at 76.45. Technically, next major support is not until the summer 2015 high of the 2134s.

--
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to my intraday service. 
For details and the latest offers, see: Permabeardoomster.com