Despite the Wuhan coronavirus is still running rampant and the global economy is slowing , both the Nasdaq Composite and S&P 500 made another all time high today. One may asks why the stock market keeps going up, I think the best answer is because there are more buyers then sellers. This is probably helped by trading computers and institutions with their short term money making agendas doing their job. Sometimes you just cannot use common logic to judge the stock market movement. This seems to be the time that technical trading wins over fundamental analysis, at least temporary. I have been a technical and momentum person and I rarely afraid of the market height. However, this time I am worry. I would not chase this crazy and overvalued market up because trouble can hit at any time. I would just wait for a technical signal to sell. The stock market has not been reflecting the slowing economy and the negative impact of the Wuhan coronavirus. I believe the stock market direction will soon bend to the bleak economic outlook.
Why do I believe the economy has a bleak outlook? It's all in the commodity charts.
In the following group of charts, I see that crude oil ($WTIC), Copper ($COPPER) and DBC (commodity index that tracks the price of 14 commodities) are all racing to their lows since the early part of January 2020. The only reason for this happening is there are lack of economic growth to drive the demand of these basic commodities. Notice that the downtrend of these commodities started way before the knowledge of the Wuhan coronavirus was known. This means the economy has been slowing even before the coronavirus hit. The virus is now wide spreading and caused china to lock down 80 cities in 20 provinces involving 400 million people. Most of the factories in China are closed and the supply chain to the the world is interrupted and more negative impact to global economy is certain. Another indication of weak economy is the London Baltic Exchange's Baltic Dry Index (BDI) which measures the world's demand for shipping capacity versus dry balk carriers has been steadily trending down. The 10 year treasury note yield ($TNX) also has been dropping since early January too and the treasury bond ETF TLT has been rallying. Gold ($GOLD) has also been in a steady up trend. These are indications of investors seeing risks and seeking safe haven.
The stock market will likely come down hard when realities hit. The realities will likely be the coronavirus situation getting worse, February's weak economic data are released and when analysts start to lower their earning projections and downgrading stocks.
Latest Wuhan coronavirus statistics：
尽管武汉冠状病毒仍在肆虐，全球经济在放缓，纳斯达克综合指数和标准普尔500指数今天却再创历史新高。有人可能会问，为什么股市会持续上涨，我认为最好的答案是因为买者多于卖者。交易计算机和机构行驶他们进行短期交易的议程来帮助他们短期获利可能是推动市场上升的原因之一。有时，我们是无法使用通用逻辑来判断股市走势的。现在似乎是利用技术分析交易胜过基本面分析的时候，至少是暂时的。我一直是技术分析和追随动力的人，我很少担心市场的高度。但是，这次我很担心。我不会追逐这个疯狂而估值过高的市场，因为麻烦随时会出现。我会等候技术性卖出信号出现才行动。现在的股市并未反映出经济放缓和武汉冠状病毒的负面影响。我相信股市将很快转向与黯淡的经济前景同步。
为什么我认为经济前景黯淡？全部都表现在商品图表中。
在下面的图表组中，我看到原油（$ WTIC），铜（$ COPPER）和DBC（跟踪14种商品价格的商品指数）自2020年1月上旬以来都一直跌向低位。发生这种情况的唯一原因是缺乏经济增长来驱动这些基本商品的需求。请注意，这些商品的下降趋势在知道武汉冠状病毒之前就已经开始。这意味着经济甚至在冠状病毒发作之前 就一直在放缓。该病毒现在正在广泛传播，并导致中国封锁了20个省的80个城市，涉及4亿人口。中国大多数工厂都关门了，通往世界的工业供应链中断了，而且必将对全球经济产生更大的负面影响。经济疲软的另一个迹象是伦敦波罗的海交易所的波罗的海干散货运价指数（BDI），该指数跟踪世界对托运需求及运输船只数量的比数一直在稳定下降。自1月初以来，十年期国债收益率（$ TNX）也一直在下降，国债ETF TLT也一直在上涨。黄金（$ GOLD）也一直处于稳定的上升趋势。这些迹象表明投资者看到风险并寻求避风港。
当现实到来时，股市可能会大幅下跌。 现实情况可能是冠状病毒情况变得更糟，2月份疲软的经济数据发布以及分析师们开始调低对企业盈利预期并降低股票评级。
最新武汉病毒统计：
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