I have been 'off' from blogging for a long long time but that doesn't mean I have been away from trying to understand the stock markets. While browsing through my unpublished and incomplete posts, I realized that one of the articles was about how in 2015, the crash was inexplicable and that every sector was impacted. It was an event I had never seen in the years of trading (till then).
The last 2 odd months, Covid-19 has created a round of panic selling and immediately followed by frenzied buying. What I saw in these last 2 months trumps my previous inference. I saw Dow Jones hit 7% circuit breaker not once or twice but 3 times. That's a first for me in 20 years of trading. Crude slumped to hit multi-decade lows. Again a first. Job losses across industry sectors never seen after the Great Depression of 1929, another first. A Phoenix-like rise of the markets never seen before and today, WTI Crude Contract hitting a low of -$37.63. How does crude oil contract go negative?
The answer from various sources is that there's no storage available for the crude oil. Why no storage? Because of Covid-19, demand has been less and the oil production (though lower than usual) has not stopped. So all the oil being produced needs to be stored somewhere and there's no space to store.
So will the stock markets crash during the day on Apr 21, 2020? Dow Jones Index @ 1517 Hrs on Apr 20, 2020 doesn't show any signs of a crash.
Its a wait and watch.
The last 2 odd months, Covid-19 has created a round of panic selling and immediately followed by frenzied buying. What I saw in these last 2 months trumps my previous inference. I saw Dow Jones hit 7% circuit breaker not once or twice but 3 times. That's a first for me in 20 years of trading. Crude slumped to hit multi-decade lows. Again a first. Job losses across industry sectors never seen after the Great Depression of 1929, another first. A Phoenix-like rise of the markets never seen before and today, WTI Crude Contract hitting a low of -$37.63. How does crude oil contract go negative?
The answer from various sources is that there's no storage available for the crude oil. Why no storage? Because of Covid-19, demand has been less and the oil production (though lower than usual) has not stopped. So all the oil being produced needs to be stored somewhere and there's no space to store.
So will the stock markets crash during the day on Apr 21, 2020? Dow Jones Index @ 1517 Hrs on Apr 20, 2020 doesn't show any signs of a crash.
Its a wait and watch.
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