Monday Market Movement – Back in the Bottom of our Range

Well this is no surprise

Back on April 15th, in our Live Chat Room, I said to our Members:

"What we really care about is the bigger picture and we know 2,850 is our old Must Hold and 2,300 (2,280) is our -20% line and 2,550 (2,565) is our -10% line and that's the range we expect to be in.  

Once things calm down, we should range up or down 10% around 2,850 for the 2nd half of the year but I think for the next few months, it's more likely we stay between 2,550 and 2,850 and consolidation there would be nice and healthy for a good move back to the top of the range that's more likely to stick."  

We expected the top of the range to be a barrier and we lightned up on our longs and added more hedges at the top and, since then, we're pretty much right where we were at the time but this morning we're down yet again on the Futures, down 5% in the last 3 sessions as the Adminstrations "Blame China for Everything" strategy is not really inspiring investor confidence. 

Warren Buffett isn't buying this dip and that's kind of disturbing.  My long-time readers know how much I love Buffett but I don't always agree with hm these days as he's losing a few steps from what he was so, just because he says something doesn't mean it's true – as evidenced by his sudden love of airlines, now ended as he dumped them all – since he's not confident that industry will recover from the virus any time soon (and "soon" to Warren Buffett is years, not months!).  

Buffett said his $137Bn cash on hand "isn't that huge when you think about worst-case possibilities… We don't prepare ourselves for a single problem, we prepare ourselves for problems that sometimes create their own momentum."  You can understand why Buffett is upset – Berkshire Hathaway (BRK.B) is down 20% at the moment and probably headed back to down 30% after reporting…
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Fall Back Friday – What a Good Time For a Trade War!

Coronavirus vs Trump: the US president's authoritarian bluster has ...Trump is officially out of control.

It's May 1st and the Federal Government just ordered 100,000 more body bags on top of the 60,000+ (more than the 20-year Vietnam War) citizens we've already buried.  It was literally just a month ago that Trump told Hannity (3/26) that he didn't think the medical equipment the Governors were asking for was needed – so he didn't send any of that.  Now he is ready to send 100,000 body bags instead – those only cost $5M – much cheaper than actually helping.  

This isn't about that, if you don't realize Donald J Trump has completely and totally bungled the job of fighting the Coronavirus – then there's no facts that will ever convince you otherwise – they are all out there already.  This is about the new disaster Trump is causing by seeking to distract people from his inept response to the virus and the deaths of 100,000 voters, who knew 1M other voters at least and, by election day, it could be 10M voters, who knew 1M dead Americans.

"In a transparent attempt to distract from his continuing failure to lead an effective response to a disastrous public health crisis, the great showrunner in the White House is in the process of introducing a new story arc: an epic battle with an evil China.

"It involves blaming China for a virus that was most likely uncontainable, making all sorts of dark insinuations and demanding that his intelligence services find grist for anti-Chinese conspiracy theories, and threatening massive economic retaliation, apparently even to the point of defaulting on U.S. debt." – Salon

Trump is threatening more tariffs, Trump likes tariffs, his base likes tariffs – China is fun to hate.  As Orwell predicted about Trump in 1984:

"The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they


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