38 Thursday: S&P 3,800, 3,800 Deaths Yesterday and Bitcoin $38,000

Image result for ignore virus deaths cartoonA lot of 38s this morning.

I'm not one of those numbers people but I just noticed it in my scans and found it interesting.  More so, I find it disturbing that 3,843 Americans died yesterday from Covid-19 and 118,991 people were infected (just under 1M per week) and you would think, listening to the news, that we have this situation well in hand.  People – this is denial.  Yes, we have a plan but you can't have 27,000 people a week dying and act like things are good.  That's 108,000 people per month – Burbank, CA has 102,511 people in it.  Green Bay, WI has 104,576,  Boulder, CO has 105,673.

This is still an ongoing crisis but the market is pricing in two things that don't go together – that the virus is "fixed" but also that we will keep getting Trillions of Dollars in stimulus while the economy makes a fantastic recovery.  This is what they call "pricing to perfection" but actually we're pricing perfection PLUS stimulus and have now moved well beyond perfection in our valuations.

Overall, we're still lurking about that 3,850 line, which is the 35% line (over 2,850) per our 5% Rule™.  I'm not going to get into the whole valuation discussion again but we'll either break out of this channel (back to 3,700) or we'll fail it and failure has no support all the way back to 3,560.  That makes the risk/reward play for shorting the S&P (/ES) Futures below the 3,850 line a very tempting play.

There WILL be stimulus – it's just a matter of how much but $1.9Tn is baked in and it certainly won't be more and earnings have been generally good so that's baked in and most of the big market movers have reported so there's no new catalyst and we're only vaccinating 1M people per day or 10% of the population in a month and Q1 ends in 60 days so can't improve much there and even if we get to 1.5M/day by the end of March, that's only 1/3 of the population vaccinated by the end of Q2 so marginal improvements then – not full improvements in the economy ahead. …
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