I am just looking at the 4hr chart:
Points:
- GAP at the red horizontal line has been filled
- I anticipate the market leaning towards the purple horizontal line to fill the GAP around 4700.
- RSI dancing around 40-60 so buyers and sellers are not sure what to do in this market.
People need to understand that all countries need to see correlated improvement. This means we are all recovering at the same time! Austrlia might be on the verge of beating it (touch wood to not jinx it) but what about Turkey (80% increase in two weeks)? What about Russia (increase of 300% in two weeks)? Ecuador doubled cases a few days ago from delayed tests.
The US seems to be increasing on average by 30k cases per day. What does that tell you? It means that there is only a certain level of testing available. Certain number of people being tested daily.
The fundamental principles (rest of CY2020) are clear.
- Credit risk, banks being forced to write-off billions, unemployment is skyrocketing everywhere, consumer spending to reduce significantly.
- Central banks/governments heavily involved to try support economies through monetary/fiscal policies.
- More COVID cases per day, than recoveries.
- Travel and tourism unlikely to recover for a while as people skeptical to travel. Consumers unlikely to spend due to increased caution and will try to save money.
This virus has hurt the economy not just financially but raised extreme fears to the people. On a microeconomic perspective, people/businesses buying and selling is the blood of an economy.
Even if a cure got approved today, it would take time to produce. It would need finance (doubt that would be an issue) to produce.
Consumers fears need to be ridden quickly. People need to go back to work after governments cut the wage subsidies.
It took years after the 2008/2009 GFC to recover and for consumers to start spending, for credit risk to improve.
Let's let the market decide what it is going to do.
(20min delay)