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Fear Reigns.
US equities careened sharply lower in volatile trading on Thursday, in keeping with the current environment, where sentiment is hostage to coronavirus headlines and markets are beholden to an underlying setup that's conducive to exaggerated price action.
Texas health officials announced the state’s first coronavirus case outside of a federal quarantine site in what commissioner John Hellerstedt called a "significant development". The patient was infected while traveling outside the country, a
We’ve got a long way to fall.
https://www.multpl.com/s-p-500-price-to-sales
I’m guessing that we’ll spike down then move sideways until march 18th. Good setup there. How far? Who knows? But I suggest all you young traders who think stock prices only move up, sell now and save yourself some pain. The markets are still richly priced, and when the jobs numbers start tanking, you won’t know what hit you.
Without major Fed intervention after March 18th, I’d guess a drop to about 2400 on the S&P could be in order for the medium term. But on the positive side, companies will be busy buying back their own shares, setting a firm base for the next move up.
For what it is worth, if you look at the website: Flightradar24.com, you can see a lot of detail about flights in/out of China over the past few months. As expected, the number of flights have decreased dramatically from December 31, 2019 through Feb. 25. I think that normally, by Feb. 25 China would have been up and running after Chinese New Year. However, as of March 3 (compared to Feb. 25) the flights out of the largest airports have doubled, on average, except for Wuhan, which is only 7 flights/day compared to 272 flights on December 31, 2019.
Mystery charts at FRED:
https://fred.stlouisfed.org/graph/?g=qhYk
H-Man, this long gamma, short gamma has been befuddling. But when you throw in that VaR variable I collapsed.Getting off ground, I dusted my pants, and recalibrated. So if I get the drift, $$$ people assess risk and trade according to the formula. Since the VaR is a moving target, balance risk against the collapse of the position. VaR requires more short hedging to protect the position Down market on the VaR requires more selling. Got it. But liquidity in the market is a topic for another day. Question: How much has the VaR changed in the last 15 days?