Now we’re starting to talk the same language.
Overnight in the US the Centers for Disease Control and Prevention (CDC) held a press conference.
When asked about the official numbers of the coronavirus, their rep Anne Schuchat said, ‘we absolutely assume that the reported cases are an underestimate.’
Translation: the problem is bigger than anticipated.
Anne Schuchat is the Principal Deputy Director for the CDC.
Then there’s the guy from the World Health Organization…Tedros Adhanom.
He originally said China had been doing a great job controlling the virus…
Ha! On Monday he said there were:
‘[S]ome concerning instances of onward transmission from people with no travel history to China’.
Then he added: ‘The detection of this small number of cases could be the spark that becomes a bigger fire. But for now it’s only a spark. Our objective remains containment.’
It’s Chinese state-run propaganda
I’m lost for words, I really am…
But it doesn’t stop there. Xi Jinping was caught with his pants down too…
He’s the president of China. His latest stunt was laughable.
Take a look at the image below…
Source: The Guardian
See the dude in the middle?
That’s President Xi Jinping. He’s wearing a surgical mask while touring a Beijing neighborhood.
Now here’s where I cracked up…
Xi Jinping said — emphasis added:
‘It is a special period. Though, I would like to not shake hands. We must have confidence; we will definitely overcome this epidemic.’
This dude doesn’t want to shake hands because he knows damn well that a surgical mask is going to offer him very little protection…even though he’s wearing one.
But hey, he must fit in with those around him…and that’s why I’m calling this ‘state run propaganda’.
Here’s a stock chart to watch – The Dow Jones
Anyway, it’s time to bring it back to the markets…
Let’s take a look at the Dow Jones. As you may remember, we’ve been tracking it for around three weeks now in relation to the Coronavirus.
You can see an image of the chart below.
Source: Trading View
What you’re looking at above is the daily chart of the Dow Jones.
The Dow Jones consist of 30 companies in the US. We’re following this chart because it has a good mixture of sectors.
Overnight the Dow Jones turned down. And this was even with Chairman Powell saying that the Fed would continue to inject capital into the repo market until April.
The repo market is short for a repurchase agreement. It’s a short-term source of cash for big market players.
Where some of this money is flowing is anyone’s guess. One could assume that bits of it is being injected in the stock market.
Wall Street on Parade thinks that the repo market has funneled $6.6 trillion into Wall Street over the last four months.
‘Since September 17, 2019 it has funneled a cumulative total of $6.6 trillion to some of the 24 trading houses on Wall Street that are known as its “primary dealers.’
‘The giant sum has been sluiced to Wall Street in the form of repurchase agreement (repo) loans without any details being provided to the elected representatives in Congress as to which firms are getting the money or what it’s being ultimately used for.’
Here’s the answer
Guess we’ll just wait and see.
What this means for you is that stocks are bias to the upside. If that plays out or not, we’ll find out in time.
It just brings back the old Wall Street mantra that ‘you shouldn’t fight the fed’.
If you’re looking for a way to really understand if this is going to be the case or not. You should always pay attention to the charts.
After all, the bars price action is the answer of mass thought.
And the four lines that I’ve placed on the chart will give you early warning signs of what’s going on behind the scenes.
All you need to do is watch them. Each time the Dow falls below one of these lines…the more you should be put on alert.
Right now the Dow is 8.8% away from the red line around the middle of the chart.
But it’s only 1.75% away from the pink line.
For this bull market to rage on, you would primarily want to see it stay above each line.
Just think of it this way. The more lines the Dow Jones can stay above. The stronger the market is.
Until next time,
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