Market Sentiment Moving Into April 6-10
Last week the market fluctuated opening Monday at $255.68 and then closing at $248.19. Experts are saying that the bull run is over as the overall sentiment has shifted negative last week, especially after a steep drop on Wednesday April 1.
The Hightower report has stated that: The equity markets waffled around both sides of unchanged today with the markets greeted by news that payroll protection program might have difficulty being executed by the banks. The markets were also presented with a somewhat dour New York governer press conferences regarding the state of the virus conditions. As usual the market seemed to be concerned about the possible negative virus headlines from the weekend and the probably prompted some investors to sell today.
The report is referring to Cuomo's "I Don't have an option" press conference. He mostly spoke about the shortage of ventilators which will leave New York without Ventilators in less than a week. He stated he is willing to take drastic measures to secure ventilators for New York.
In addition, experts are unsure what lies ahead. That scale of market disruption has made some market participants more doubtful. Investors may be overly optimistic in their expectations for a sharp market rebound even if the number of U.S. coronavirus cases flatlines earlier than expected, said Nancy Perez, senior portfolio manager at Boston Private.
Dow Jones futures will be watched closely once again on Sunday, along with S&P 500 futures and Nasdaq futures, as coronavirus cases and deaths continue to soar. Technically, it's a coronavirus stock market rally, but Thursday's follow-through day and Friday's retreat didn't offer much confidence.
Apple (AAPL) has fallen below its 200-day moving average. Tesla (TSLA) is struggling with short-term resistance. Microsoft (MSFT), Amazon.com (AMZN), Nvidia (NVDA) and Advanced Micro Devices (AMD) have been turned back from their 50-day moving averages.
Meanwhile, some promising stocks have broken apart, notably DocuSign (DOCU) and GSX Techedu (GSX). A few other stocks have briefly entered buy zones, singeing any investors who tried to jump on board.
The current stock market environment is the most-dangerous for CANSLIM investors. During a bull market, most stocks are rising and it's relatively easy to make money. During a correction, especially the full-blown vertical-violation coronavirus stock market crash, investors know to move to the sidelines. But choppy, uncertain markets are dangerous. Some quality stocks are setting up and a few stocks have cleared proper buy points or early entries. That can be tempting. But the volatile, choppy action means that investors are apt to buy on an upswing and then get caught on the downside.
Based on the choppy, volatile environment, and current sentiment we've seen recently, it can be expected to see a 8-12% drop in stock market value over the next week.