Corona Virus - Black Swan Event - The Markets Are Crashing

So I've been watching this market VERY closely (aside from the fact that I'm actively options trading right now) in relation to the events happening in Asia. Let's dive into the market side of this with total disregard to the validity or politics of this event.

A50 Shanghai Futures



China Market Opening Delayed Until Feb. 3 on Virus Upheaval

So, A50 is a futures market that tracks Shanghai Composite (well, Chinese markets to be exact). As you can see the futures market has been NOSE DIVING all week with the Shanghai Composite has been closed. This opens on the 3rd (Sunday night stateside). The impact of this event hasn't even begun yet, this is a true black swan event.

TLT (inverse 30 year bond yield ETF)



CNN Futures

TLT is an inverse bond yield ETF. What this means is that when people buy bonds that pushes the bond yield down, when the bond yield goes down TLT goes up, so when people buy bonds TLT rises. Bonds are considered a risk off, safe investment.

Typically risk off investments rise (think gold and bonds) as global economic conditions worsen. Duren periods of expansions things like TLT and Gold will drop.

SPX (S&P 500)



SP500, we all know or should know what this is. As you can see from the chart SP 500 has broken 2 key support levels and is heading for 3200. This is the next level of support for the SP and I fear it's going to break on Monday.

HSI, Hang Seng Index



Hong Kongs stock market, NOSE DIVING. This has actually been open this week and we haven't even begin to see the affects of this yet.

USOIL Fund



The oil markets are literally tanking as commerce and travel are shutdown in China and travel is being shutdown abroad.

Coronavirus impact on China’s manufacturing not ‘yet fully manifested’ even as factory output cools

The official purchasing managers’ index (PMI) dropped to 50.0, the National Bureau of Statistics (NBS) said on Friday, having remained steady at 50.2 for the last two months of 2019 following a reading of 49.3 in October.

“I would disregard today’s release,” said Raymond Yeung, chief economist for Greater China at ANZ. “The figure certainly overrates the economic outlook as it does not reflect the interruption due to the outbreak.”

The economic affect of output from China's manufacturing base will be heavily impacted as many companies and provinces in the country are telling their employee's not to return to work until the 13th or later.

Once the impact of the manufacturing shutdown affects the supply chain and inventories of retail in the US and abroad the real affect of this will be felt. Prices will rise on consumer goods and lead to a slowdown in economic growth globally.

a reply to: toysforadults

Dramatic graphs on our world situation Toys. My only critique of it pertains to the use of the term ''black swan''. A true '' black swan'' is an event that had not even been considered or imagined prior to it's realization. Something completely out of left field that no one could have been prepared for.

These crashing markets due to a world shutting down due to a mad virus is something that even those of us who do not dabble in the markets have foreseen for quite a while.

a reply to: TerryMcGuire

Trust me the market for the most part was no ready for this. This came out of left field. The market sentiment was incredibly bullish until a few weeks ago.

a reply to: toysforadults

Granted, the market was not ready for this. However it should have been. This transition from isolated populations and isolated markets to a whole world market place should have taken not only this virus but for that matter all the other disturbances that could wreck havoc on business as usual into account this fact.

a reply to: TerryMcGuire

Someone knew something was up ahead of time. TLT and GLD broke out at the beginning of the year.

a reply to: toysforadults

Yep, the smart ones

a reply to: TerryMcGuire

Goldman Sachs and the institutional investors with inside knowledge

a reply to: toysforadults

Ouch, this is going to hurt unless we get a rebound going here.

US Europe Asia FX Rates Futures Crypto Range Dow 28,241.91 -617.53 -2.14% S&P 500 3,222.59 -61.07 -1.86% Nasdaq 9,148.88 -150.05 -1.61% GlobalDow 3,160.57 -54.47 -1.69% Gold 1,591.60 2.40 0.15%

www.marketwatch.com...

a reply to: Chance321

down we go... BRexit adding insult to industry

2020 is going to be a fun year

People! the media is lies!

The Corona Virus is BS!

The markets are crashing because CRUDE is crashing. They want you to think we have a strong market but it is being propped up by the FED printing money and buying stocks.

As CRUDE goes so does the market.

We are going to need more war or bombs for CRUDE to be propped up to keep the energy sector from completely collapsing the economy on itself.

We are in economic free fall. The Corona Virus and everything else you hear is DISTRACTION.

a reply to: booyakasha

As CRUDE goes so does the market.

word

if crude breaks 48 we are in for some #

a reply to: booyakasha

Oil is dropping because demand is dropping because travel and shipping is grinding to a total halt because of the coronavirus. This isn't rocket science nor does it have a goddamned thing to do with needing a war to "save" the energy sector. It is absolutely driven by a single point in time event, that event being the Angle of Death slowly creeping out of Hubei China over the second half of the month of January, 2020.

originally posted by: toysforadults
a reply to: booyakasha

As CRUDE goes so does the market.

word

if crude breaks 48 we are in for some #

With the additional flight restrictions and likely extended factory shutdowns, we're guaranteed to see oil break $48. Hell, if the news this weekend gets any worse and it starts to look like the US may end up having to close down businesses for a spell as china has done, oil will probably open below $48 Monday morning.

a reply to: toysforadults

In this chart are those the 9 day and 18 day moving averages that almost converge back on MLK day?

files.abovetopsecret.com...

a reply to: Bordon81

200 day, 50 day and 20 day

that's called a death cross if you want to google it

originally posted by: burdman30ott6

originally posted by: toysforadults
a reply to: booyakasha

As CRUDE goes so does the market.

word

if crude breaks 48 we are in for some #

With the additional flight restrictions and likely extended factory shutdowns, we're guaranteed to see oil break $48. Hell, if the news this weekend gets any worse and it starts to look like the US may end up having to close down businesses for a spell as china has done, oil will probably open below $48 Monday morning.

yup which is why I bought GLD call options and SPY put options today

my GLD calls are 152 strike and the SPY puts are 300, I think this bad boy will hit 300 before it bounces or recovers

I am not your financial adviser

originally posted by: burdman30ott6
a reply to: booyakasha

Oil is dropping because demand is dropping because travel and shipping is grinding to a total halt because of the coronavirus. This isn't rocket science nor does it have a goddamned thing to do with needing a war to "save" the energy sector. It is absolutely driven by a single point in time event, that event being the Angle of Death slowly creeping out of Hubei China over the second half of the month of January, 2020.

I agree

I basically agree with your sentiment in general on this topic

originally posted by: toysforadults
I am not your financial adviser

I follow the market, but don't personally play in the market. It's sort of like Danny Sheridan the famous sports bookie/oddsmaker, he makes his living selling advice to people who make their fortunes taking that advice on games while swearing he's never placed a single bet himself.

My retirement is largely tied up in employee ownership stock for a non-publicly traded company. I of course have some contingency investments, but they're all long haul stocks.

When not being directly manipulated, the market isn't as complex as most think it is.

a reply to: burdman30ott6

not scary at all

people find it intimidating out of fear not actual lack of ability

I tell people this everyday almost

but when you learn how the market REALLY works it shines a bright shining light on the rest of the world and politics, it's amazing what you can learn from the market

I'm mostly an options and swing trader

The Fed is going to have to flood the market with money supply to get things hopping again! Get this economy rolling again like in 1999.