Is It Time To Buy??? - Part 7

The number of people affected by the COVID-19 virus has crossed the 100,000 threshold as the number of people infected continue to increase worldwide.

In Iran 8% percent of Iran's parliament or 23 out of 290 members have been infected. So far, one of Iran's vice presidents and a key adviser to Ayatollah Ali Khamenei has died from the virus.

Italy has been titled, the country with the highest death rate outside China. So far, over 230 people have died, while the number of people affected with COVID-19 increases to over 5800.
Last week, we got word that 21 people aboard the Grand Princess cruise ship, which has been since docked in California have tested positive for the virus. Of the 21 people who tested positive, 19 were crew members of the ship and two were passengers.

On Friday, the DOW fell more than 800 points, before snapping back late in the day. It was really, really crazy because in the span of 30 mins, the DOW rose more than 600 points or 3% to close the week for a sight gain. Possibly the Markets know a potential stimulus package is coming as the White House economic adviser Larry Kudlow said the Trump administration is considering a “targeted” stimulus program for businesses hit hardest by the outbreak.

Economist, current chief economic adviser at Allianz and former Pimco chief executive, Mohamed A. El-Erian said this environment that we are in is for the highly skilled trader and felt that long term investors should sit out. In early February El-Erian said the virus would have negatively adverse cascading effects on the global economy and that rate cuts and fiscal stimulas would make “buying the dip” challenging. Last week, he was on CNBC and reiterated that investors should stay out the Markets for the time being.

David Mazza, Direxion: “From a longer term perspective, valuations across the market just got a lot more attractive. For investors that do not believe this will lead to a true 2008 type of global downturn, dipping your toes into the water does make some sense. This is data financial markets have a great deal of difficulty pricing in. Until we see US consumption turn negative, that continues to position me for the long-term positive.

Tom Essaye, The Sevens Report: “There is no question that growth and earnings will be lower in the coming months, and while we saw some pretty significant cuts to expected S&P 500 2020 earnings per share(some as low as $150), the rational consensus is for EPS currently between $165-$170/share for 2020. Taking the midpoint ($167.50), that means the S&P 500 is trading at 17.6X 2020 EPS, down from just under a 20X multiple less than two weeks ago…we think that is too pessimistic for the current situation.

“Now, does that mean we should rush in and buy stocks hand over fist today? Of course not, says Essaye: “There is been enormous technical and psychological damage done to the markets and that will take time to work through — so at best we can likely expect several weeks or a few months of chop as the market finds a bottom.”

Source

For the past two weeks, I have listen to both camps, the bulls and the bear camp. To me, it's comical to here both opinions, but it's not comical for the avg. investor that doesn't know what's going on or doesn't know what to do with their money in their retirement fund. It's not comical for those who lost everything during the Great Recession. It's not comical that the top 20 people in the world own as much as the bottom 4 billion in the world.

Big picture levels to be mindful of are:

Small picture levels to be mindful of are:

This post is my personal opinion. I’m not a financial advisor, this isn't financial advice. Do your own research before making investment decisions.

Posted via Steemleo