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Looking For A New Stock Market Low

Here's some of the notes we told subscribers today. While we've been sharing this weekly publicly, subscriber receive this and other reports intraday & daily on tech, trading and markets including our world ranked stock picks, timing calls and live chat. To see our full comments along with specific daily stock picks click here.

Oh my so much to talk about.

Fed cut rates again to 0% tonight, Sunday. That's ahead of their Wednesday meeting.

First, an Exercise (That Can Help For A Lifetime Of Trading)

Let's do an important exercise. This exercise is going to help you for the rest of your trading career.

Close your eyes.

I'm going to tell you something and you tell me the image (market direction) you have in your mind.

The Fed cuts rates to zero percent and adds $700B in quantitative easing. What market direction comes to your mind?

Up right? No way futures are limit down, right?

Nope.

This is the art of trading action.

If you think news should get something in one direction but it went the other way then it's most likely going to keep going the "wrong" way. Meaning, there's something much bigger if that "good" news couldn't get it going in the "right" way.

Remember that exercise above was for you to have for your trading lifetime to help you assess news as it prints and how to react... By watching action.

Now back to business

The Fed announced 0% and $700B in QE. That should have the market ripping like on Friday. The market is down limit 5% right now. That's good news bad action. I said on chat last night (subscribers) before this news I'm beared up for a down move on Monday. This action tells me it's coming.

And guess what? The Fed had a huge injection on Friday that didn't work either (here). Ouch! So they tried again. I think it won't work again. This problem can't be fixed by Fed money.

I think there's a chance for more downside on Monday but I'll be waiting for the open to see what price I want to short. I may short a little on the open and see.



All that matters....

New cases are jumping.

You know that's the most important stat to markets. Countries are going more on lock down.

But the US is still deciding. Senate hasn't met after the House passed a CoronaVirus bill. Trump is still deciding to do whatever it takes. Still sounds like countries are moving too slowly.

And you see that chart above with cases unfortunately jumping. They're up the same percent day-to-day but on bigger and bigger numbers. No good. Yesterday may have slowed but we also had a slowdown on March 12th only to be followed by a big up. So need to watch.

I strongly believe that the only fundamental work we can do right now is simply stare at these numbers just above. If it's moving up it's not good for the world and markets. If it starts to slow it's very good, of course all around.

That it's still moving up and governments are still in think-about-it mode, that's not good. That's risk for markets.

This event is a huge curve ball for anything the Fed can do.

This virus is causing the US government's debt to balloon. That's not a safe place for markets longer term.

Memory Lane

We used $SPY 331 break to call out this move

Here's what we said to subscribers the day of that Feb 24th break of $SPY 331,

"$SPY sliced through 331. That tells me there's more follow through downside risk near term."

"The direction has clearly changed to down."

"This is a clear time for me to want to be cautious."

That big slice through $SPY 331 was a key signal for more downside.

Fast Forward To Today

Getting to a key level of 271 $SPY on Friday was also a signal for me that we just barely got there and looks like Monday's going to be down big off of that. That tells me we can make another new low this week.

I said there's going to be a battle between 265-255 $SPY in chat. I think we can ultimately reach $SPY 220-221. I think the news is that bad.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. All trades are hypothetical to show rating and opinion. All trades exclude relevant transaction costs. We have no holdings in the stocks mentioned unless otherwise noted.

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