Pandemic Panic Spurs Bear Market
2020-03-11 | Simpler Trading Team
There was nowhere to hide Wednesday as most every sector was selling off during an historic tumble into bear territory.
The coronavirus was officially listed as a global pandemic as the Dow puked for the second-worst fall in a day, down 1,464.94 points. The largest fall was Monday when the Dow dropped 2,013.45 points.
Expectations of a rally into the close never happened as extreme selling pushed into the last hour of the day.
Simpler Trading moderators were selective with trades throughout the day as they focused on limiting risk and maintaining a high cash percentage in their accounts.
Even with internals hinting at a morning rally Thursday, holding anything overnight is considered risky. Anything bearish could get crushed by government intervention.
Thought of the day was maintain capital and monitor position sizing: how much do traders want to risk?
Moderators believe there are opportunities in this volatile market to do well, even when trading a small account with cautious position sizes.
This week has been historic in the markets and traders are anticipating more of the same, possibly uglier.
We Saw: Dow plummeting into bear territory —
- Coronavirus officially a global pandemic
- President promising full power of government to help
- Key sectors 10% or more off 52-week highs
We’re Watching: … what can rally against bear market fall? —
- Again, priority goal is to preserve capital
- Keeping an eye on WMT, NFLX, ZM during storm
- When in doubt on trades, lighten up the load
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