Crash Update — Including Downside Targets for The DJIA And S&P 500 Indices
The comments below are an edited and abridged synopsis of an article by Clive Maund
The market crash called for by Gold Eagle on February 15, right before it started, is now going full bore, and in this update Maund examines the short-term outlook, especially insofar as it affects his tech sector puts, and also the grim longer-term outlook.
A full-on catalyst for the crash has arrived in the form of Covid-19, or the coronavirus, which has already brought the Chinese economy to a virtual standstill, thus disrupting global supply chains, and now threatens to wreak havoc elsewhere, not least in the US. The ‘everything bubble’ had reached incredible extremes, and this virus crisis catalyst was just what was required to burst it. Now that it has started, no amount of central bank money pumping or wild promises will stop it.
Maund begins by looking at the latest 6-month charts for the Dow Jones Industrials and the S&P500 index, and then moves on to longer-term charts.
“In a follow up due to be posted later this morning, we will consider what to do with our tech sector puts, in which we already have massive profits. If for any reason this article does not appear by the open… then go ahead and take profits in all puts, because a technical bounce looks likely soon, and the plan is to book our huge profits and then roll a percentage of them into lower cheaper strikes, thus reducing potential trimming of our gains in the event of a snapback rally.”