With the US Federal Reserve cutting rates by 50 basis points, the IMF and now China joining in to add stimulus to address the coronavirus epidemic (some now say a pandemic), many who trade equity markets are walking into daily shocks – note that some markets have seen record moves both higher and lower. In such circumstances, even the most talented traders are at risk of suffering losses that no one can justify.
Some traders and investors have, rightfully so, have stepped back and watched. We have a view, and that is to pick solid and easy to identify downside and upside levels and accumulate or reduce according to wide-ranges, and fixed levels. For weeks, we have suggested that the Nikkei 225 level of 18,620 is the downside target that we feel could trade in the March selloff. This was part of our installments and updates of the past month – February Rally Becomes March Selloff. We will continue to add to these comments.