WHO raised their alert level to phase 5. I expect it to be raised to 6 in a matter of days. Remember the avian flu outbreak? The highest WHO alert on that was 3. Even though Americans are recovering, it is the virus geometric rate of infection and possible mutation into a second strain that worries me. A vaccine will not be made available for months. Take proactive measures to isolate yourself from anyone showing symptoms. That's right, no hugging or kissing, sorry.
As for the market, it went higher as predicted. Any sized pop will bring the market over 875. This level on the SPX is absolutely critical. It is the largest and most powerful resistance level that is preventing possible movement up to the 200-day MA. Nonetheless, the fact that we've been testing it for several weeks shows me that the market still wants to go higher. We may be forming an ascending triangle off of this range. 875 is the tell. I personally expect some sort of consolidation after a 2%+ move.
A look at the RUT and COMP also suggests that we move higher. Out of the DJIA, SPX, COMP, and RUT, the latter two show the best promise. Is it no wonder that all my longs are small caps? If you're in tech stocks, then you're winning big. Concentration should be placed on small caps and tech. If you are looking to go short, the airlines formed a breakaway gap on Monday. This viral strain will spread quickly, and it will hurt the industry. CAL and DAL are possible prime swing short candidates.
Despite my near apocalytic first paragraph, I am long many $1-3 stocks. I have a 8% FAZ position as well as a 22% cash position. The FAZ is there to serve as my portfolio's insurnace policy. Long holdings include FEED, FIG, CBB, WRES, THC, IO, and CAR. I am looking at QTM, PKD, and HERO as long candidates, among others on my list.
