04-02-2020: The Plan and Sticking To It!

Well... surprise, surprise... Largest unemployment numbers (6.6 million) in history and the stock market goes up. That makes no sense, but the market is never wrong... so there it is. Oh... but wait, it must be the 'fact' that the Saudis and the Russians are going to stop flooding the world with oil and now the oil industry will be back on its feet. That must be why the market moved higher today. I suppose the total lack of demand for oil, globally, is just a trivial sidebar. Oh, and let's not forget that the total number of COVID-19 infections has nearly doubled to over 1 million in less than a week; and the total number of deaths has more than doubled in that same time-frame to nearly 52 thousand... and no slowing down in sight. Those data didn't seem to have any effect on the market today, either. The bottom-line is this... the market wanted to move up today and so it did.

Let me tell you one other thing about today's 469-point move higher in Dow... it did not change the overall very bearish trend of the market.

The bump up today could, of course, signal the end to the bear-market trend of the stock market. But, I seriously doubt it. The data just do not support a change in trend is in the making... not yet, anyway.

The bounce today was, according to my data, nothing more than an oversold bounce. Almost half of my individual trend indicators are in an oversold condition. Add to this that the market sold off nicely yesterday and a bit of a bounce today is not a surprise. Indeed, it was pretty much expected.

Do I expect this bounce to have legs? No, I don't; not until I start seeing signs (signals) from the Sectors and Indexes that a bottom could be in play. No such indications, yet.

Oh, I could tell you what I think about how our totally shut-down economy will not start back with the flip of a switch; or why I don't see a V-Shaped recovery; or how I think the odds favor this market moving more than a little bit lower and why... I could proffer my opinion about whether or not a recession or depression is in front of us... but those would be guesses on my part and Fox Business and CNBC are replete with opinions (guesses) about the future. You don't need one more. I'd rather tell what the data are saying about where the market IS... which is far more valuable than telling you where I think (guess) the market will be in the future. The market IS in a bearish trend and that trend will continue exactly until it doesn't. And, the "doesn't" hasn't happened, yet.

What I can tell you is this: At the two ends of the extremes in my client model portfolios are my ULTRA-MAX and my Diversified Income strategies. I am 100% short in my ULTRA-MAX strategy in 2x inverse ETFs; at at the other extreme, I am about 5% short in my Diversified Income strategy in a nice premium-generating weekly naked Put. The other 3 strategies are between these two.

And, as for the market this week... I'll take a 4% down-day (yesterday), followed by a 2% up-day (today) any time I can get it when I am in a short-bias frame of mind. Let's see how Friday works out (tomorrow). The market is never wrong (as I have said many times) and the market is screaming that it is in a bear trend. So... that means I am, too.

Have a great Thursday evening... stay safe... call your parents or grandparents or both and just chat for awhile... they'll really appreciate it.

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