On March 23rd in the darkest moments of the pandemic, I wrote an article called ‘light at the end of the corona virus tunnel’ in which I strongly believed that the market, after a bruising 34% decline in only a matter of weeks, had reached a bottom and it was time to begin buying stocks again. Since that day, the market has furiously rallied 30%. I believe we will now begin another leg down as market participants begin discounting the apocalyptic drop in economic output currently underway.
In my last article, I believed that the market would anticipate a flattening of the curve for Covid19 coupled with massive Federal Reserve and fiscal stimulus. These two combined phenomena led to a violent rally in a very short amount of time. Furthermore, investor sentiment had reached extremely bearish levels leading to “washout” price action in the later part of March. Presently, I believe the market will turn its attention to what the economy is actually doing and even the most optimistic of investors will admit that it will be sometime before economic activity gets anywhere near where we were pre Covid19.
The most likely path over the next several weeks is a downtrend toward the March lows, although I believe the probability is fairly high that we will NOT break the lows. The worst of Coronavirus is largely behind us and the Federal Reserve has made it very clear that they will do whatever it takes to keep liquidity flowing through the markets.
I am advising investors to take advantage of this rally to raise cash and wait for better opportunities ahead. At GlassBead, my investment firm, we were aggressive sellers late last week.
I will provide another update once I feel the next leg down is complete.
If you are interested in learning more about our risk management approach to investing please feel free to contact us at :
We are happy to share performance data.
This message is solely for the use of the intended recipient(s) and may contain information and attachments that are confidential, privileged or otherwise sensitive in nature. The information and its contents are the property of Glass Bead Capital Management LLC. Any unauthorized dissemination, copying or use of this message or its contents is strictly prohibited and may be in violation of law. Any views set forth in this e-mail are solely those of the sender and do not necessarily represent those of Glass Bead Capital Management LLC. Glass Bead Capital Management LLC reserves the right to monitor and archive ingoing and outgoing e-mail communications in accordance with applicable law, and may disclose such communications to legal and regulatory authorities and as otherwise required by law.
PAST PERFORMANCE IS NOT AN INDICATOR OF FUTURE RESULTS.
Unless expressly indicated, this message is not an offer to sell or a solicitation of an offer to purchase an interest in any entity or investment vehicle. Any such offer or solicitation will only be made through formal offering materials. Glass Bead Capital Management LLC does not provide legal, accounting or tax advice. Any statement regarding such matters is explanatory and may not be relied upon as definitive advice. All investors are advised to consult with their legal, accounting and tax advisers regarding any potential investment. The information and any opinions contained in this e-mail communication have been obtained from sources that we consider reliable, but we do not represent such information and opinions are accurate or compas suc
The BullsNBears.com website was founded by market crash expert Michael Markowski to specialize at publishing articles by him and by other authors who have been screened. The articles pertain to market crashes, market bottoms and recessions and depressions. Register below to be alerted when a new article is published on BullsNBears.com.