Thursday Failure – Trump Shuts Travel, Provides No Solutions, No Stimulus – Market Tanks (again)

Down and down we go.

The Futures are off another 5% this morning and that is their limit (like Monday) so it's very likely we're facing another trading halt at the open with a 7% drop in the indexes to start our day.  The S&P 500 is already testing the 2,600 line 10% lower than it was at Tuesday's close (2,882)!  This is already the bottom of the range I predicted for the S&P last night on Money Talk (part 2 is here).  It's also 10% of the 15% that Goldman Sachs said we would fall yesterday – we just didn't think they meant "tomorrow"…  

I decided to post part 2 of the interview because, rather than rehash all the doom and gloom you can hear from anyone this morining (I was all alone in my warnings last month) I want to be constructive and talk about all the great things we can buy.  I am NOT ready to call a bottom yet – the markets could still drop substantially lower if this virus spreads out of control (as I said above) but, as I also said above – you have to be prepared for a move up as well as a move down though Trump's misadventures in crisis management last night do seem to make down the more likely case.

Still, we added three trade ideas to our Money Talk Portfolio and there are PLENTY of blue chip stocks that are going on sale AND the Volatility Index (VIX) is going to be in the 60s this morning and that makes it a fantastic time to SELL options – especially put contracts on stocks we REALLY want to own if they get cheaper.  

We will stay away from banks, insurance and travel stocks as we don't know how bad things will ultimately get and we will keep our entries small on the expectation we very likely may have to roll them or double down on them (or both) if the market drops another 20% but here's the kind of bargains we can engineer for ourselves in this kind of market.  Do be aware that margin requirements can jump up as the stock goes lower…
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