I heard that if you want -- well the person actually used the word "need" -- an iPhone, you will still buy it, but you might just have to wait a few more months. There was no mention, not even a consideration, that perhaps said buyer would no longer want or need or be able to afford the phone six months from now. The assumption was that it was temporary. And while that does seem to be the case, there wasn't even a consideration that there actually may be lost sales, only pent up demand.
The other line of reasoning is that we should not care about an economic slowdown due to the coronavirus because the central banks of the world have our backs and will simply flood the market with money.
I realize this has been the case for quite some time. But I am forced to wonder: If it were that easy, why have we never seen them do this before? I mean, if central banks could simply repeal recessions and earnings misses, why have they not done this before?
Wasn't this the quarter that we were to see earnings trough and we were already looking past this lack of earnings season to the other side where things were going to be so much better? I suppose that means the earnings trough will now be in the second quarter, which must give us another chance to look beyond at the sunny skies ahead!
What's another quarter among friends?
In reality, there has been very little selling in the last few weeks. But there has also been very little buying. The majority of stocks peaked in mid-January. There was selling for about two weeks and that was that. But the rebound has been lethargic outside of the major indexes; you can see the cumulative advance/decline line is still well off the highs.
A more smoothed out version, using the McClellan Summation Index, shows a literal flat-lining of the indicator since that late January whoosh down. The majority of stocks are literally just sitting around marking time. It's only the big cap indexes that see buying.
The oddest part of the entire trading day on Tuesday was that the dollar has been so strong and continued to be so, yet some commodities were strong as well, including gold. The dollar is looking a bit stretched up here and is nearing some decent resistance. So I figure I should note that the Daily Sentiment Index (DSI) for the buck hit 90 on Tuesday. Readings of 90 and above are considered extreme and typically mean a pullback is due.