Last week was another volatile week as the Coronavirus pandemic and potential economic fallout dominated the news cycle. The sell-off escalated on Friday and is expected to continue to start the week. Asian markets are down in overnight trading although it hasn't been as bad as some were predicting. The Chinese Central Bank announced a large stimulus injection into the bank repo market prior to market open and this may have had a market calming effect. Nonetheless, I expect another volatile week ahead.
In terms of our watch-list, energy totally fell apart, while gold miners had a small rally. The marijuana set-ups are basically in a holding pattern but have actually held up pretty well considering how bad the broad market sell-off was to end the week. This week I dropped five names from the list including IVN, WGO, BDT, HNL, and KEL. I have added five new names to replace those. Many of our current watch-list companies are in the "watch" category with quite a few of them on the verge of totally breaking down. I am giving them the benefit of the doubt for one more week. Several are also close to being in the "buy" category including AKG, RIO, CGG, EDT, and NB.
Overall, I am recommending caution this week until the full magnitude of the Coronavirus's impact on the market sentiment becomes clear. If things stabilize we could have a strong relief rally. If things get worse, we could see markets move into full correction mode.
"Buy" Charts Below:
Have a great week!