It was an eventful week for the market.
It started with some positive action that had many hoping that a V-shape recovery was on the way. That counter-trend bounce failed miserably, though there remained some support at the 2500 level of the S&P 500.
Both the weekly unemployment numbers and the March jobs number came in much worse than expected but the market did not seem overly surprised by that fact and there was no panic reaction to historically bad numbers.
One major change this week was there was quite a bit of reassessment of how long the coronavirus crisis may drag out. When the big counter-trend bounce was occurring last week, the narrative was that the economy would recover quickly and stocks would run straight back up on the massive $6.2 trillion in stimulus that is coming.
This week we didn't hear nearly the same level of optimism about the power of stimulus. In addition, there was talk that it is going to be a very long time before things return to normal.
We still have another week or so before earnings season starts It's going to be one of the most unusual earnings seasons ever as the vast majority of companies will not have any clue as to guidance. No one knows how long the economy will be disrupted by the crisis so it would be negligent to even offer an earnings estimate.
Technically, the market is now in a trading range after the failure of the counter-trend bounce. The top of that bounce, which is around 2640 of the S&P 500 is resistance, while the March 23 low around 2200 is support. Technically inclined traders will be looking for a retest. Ideally, an undercut of the 2200 level would create a washout, but there is some significant support at 2300-2350.
I've written often over the years that bad markets don't scare you out, they wear you out. We had a taste of that Friday as the steady selling for most of the days produces disgust and disdain among market players who are growing weary of the pressure.
This market is going to try our patience but if we keep our emotions in check the opportunities will come.
Have a great weekend. I'll see you on Monday.