{"id":98817,"date":"2020-04-05T05:52:42","date_gmt":"2020-04-05T12:52:42","guid":{"rendered":"https:\/\/www.brookstradingcourse.com\/?p=98817"},"modified":"2020-04-06T23:08:37","modified_gmt":"2020-04-07T06:08:37","slug":"depression-recession-where-are-we-heading","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/ask-al\/depression-recession-where-are-we-heading\/","title":{"rendered":"Ask Al: Depression? Recession? Where are we heading?"},"content":{"rendered":"\n<div style=\"position:relative;height:0;padding-bottom:53.125%\"><iframe class=\"sproutvideo-player\" src=\"https:\/\/videos.sproutvideo.com\/embed\/1890d2bd111ae3c590\/8d325423a94edec5?bigPlayButton=false&amp;emailTopText=Enter%20your%20email%20address%20to%20view%20this%20video.\" style=\"position:absolute;width:100%;height:100%;left:0;top:0\" frameborder=\"0\" allowfullscreen=\"\"><\/iframe><\/div>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Trading room commentary: April 1, 2020<\/h2>\n\n\n\n<p class=\"content-box-green\">Commentary:  Depression? Recession? Where are we heading?<br><em>Video duration: 8min 7sec<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The market is going lower<\/h2>\n\n\n\n<p>Remember I said on the 60-minute chart [last week] that I thought we had to go lower. I thought we really needed to get to this low or a little bit below, and maybe to this low, before we get an attempt at a Major Trend Reversal.<\/p>\n\n\n\n<p>I also talked about Friday\u2019s unemployment report [today is Wednesday]. Who cares, right? It\u2019s going to be crummy, so nobody is going to pay any attention to it. Everybody knows it\u2019s going to be bad, and everybody knows that there are tons of layoffs going on. Whether or not they\u2019re in the April report or the May report, there are going to be tens of millions of people laid off. I would not be surprised if we start to get depression type of data.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A regional depression unlike the 30s<\/h2>\n\n\n\n<p>I do think we\u2019re going to be in a depression, but I also think it\u2019s not going to be like the 1930s. I think it\u2019s going to be more like regional for the areas that are in depression with unemployment 25%. And I also don\u2019t think it\u2019ll last a long time. Officially, the Depression ended in 1932, but that\u2019s really not true. My parents were both alive back then, and they said it was really hard through most of the \u201930s. So, even though the stock market may have bottomed and they said it was really bad for a long time.<\/p>\n\n\n\n<p>So I don\u2019t think this is going to last like that, and I don\u2019t think we\u2019re going to lose 89% of the stock market. I would not be surprised if we lost 60% of the stock market by the time this is all done. But first leg down, I don\u2019t think we\u2019re going to go a lot lower. Maybe below last month\u2019s low and then a bounce, and I think we\u2019re probably going to be in a trading range.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Pandemic worse than being reported<\/h2>\n\n\n\n<p>Back in February, I wrote a <a href=\"https:\/\/www.brookstradingcourse.com\/market-analysis\/emini-has-30-chance-30-correction-coronavirus-pandemic\/\" target=\"_blank\" rel=\"noreferrer noopener\">weekend report<\/a>, and I said that the whole pandemic thing is going to be far worse than what the press is reporting, and they\u2019re missing the story. They\u2019re not listening to medical experts; they\u2019re listening to politicians. There were only 70 confirmed cases of coronavirus when I wrote that report, and I said I would not be surprised if we had over 50 million Americans infected and over a million Americans die. And I still think that is realistic.<\/p>\n\n\n\n<p>If you think about it, we\u2019ve got Dr Birx and Dr Fauci saying 100,000 &#8211; 200,000 dead, best case scenario. But that doesn\u2019t make sense. A 1% death rate \u2013 so let\u2019s say you get 100,000 people die. If it\u2019s a 1% death rate, that means 10 million people infected. You say, wow, 10 million people, that\u2019s a lot. Well, 10 million people out of 330 million people, that\u2019s not even 1%, okay? [Al spoken error, 3% actually.]<\/p>\n\n\n\n<p>Do you think the market is doing what it\u2019s doing because of a problem that is less than 1%? Right? Do you think the market loses 35% in a month because 1% of the country might get sick? Of course not. It doesn\u2019t make sense. The numbers that the government is giving do not make sense. So we\u2019re going to get more than 10 million people infected. 1% of the country is not going to make the stock market sell off 35% in a month. There\u2019s no sense to that at all.<\/p>\n\n\n\n<p>I do think the problem is going to be much bigger than what the government is saying. I think it\u2019s going to last a lot longer than what the government is saying. I don\u2019t think we\u2019ll have a vaccine until at least a year from now, so not January. Maybe April, maybe June 2021. By that time, I think there\u2019ll be far more than 10 million people in the United States infected, and far more than 100,000 dead, and far more damage to the economy than what the clowns on television are saying. You cannot shut down that many industries for months on end, and then pretend that everything is going to be back to normal in a few months.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Emini chart commentary<\/h2>\n\n\n\n<p>By the way, we should bounce here [Al is now talking about today&#8217;s 5 minute chart], but that does not mean it\u2019s a very good-looking buy. But we\u2019re at the Measured Move, we\u2019re at the Globex low, we\u2019re getting a bear breakout below a bear channel \u2013 all those things attract buyers. Bears buy back shorts and bulls start to buy for a bounce.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">US Federal Reserve and Congress<\/h2>\n\n\n\n<p>Now, the Fed (<a rel=\"noreferrer noopener\" href=\"https:\/\/www.federalreserve.gov\/\" target=\"_blank\">Federal Reserve, the central bank of the United States<\/a>) and Congress (<a rel=\"noreferrer noopener\" href=\"https:\/\/en.wikipedia.org\/wiki\/United_States_Congress\" target=\"_blank\">United States Congress<\/a>) \u2013 Congress is passing stimulus packages. The Fed is trying to rescue the economy, trying to prevent a catastrophe, a depression. I think both the Fed and Congress are doing good things, okay? But you\u2019ve got to remember their goal. The Fed is not saying \u201cWe\u2019re doing all this stuff so that the bull market will resume, and everything will be back to normal in a few months.\u201d That\u2019s not what the Fed is saying.<\/p>\n\n\n\n<p>What the Fed is saying, \u201cWe\u2019re going to do everything in our power to prevent the economy from crashing.\u201d Right? That\u2019s what the Fed is saying. Their goal is not to get the bull trend to resume. When I hear those people on TV talk about that, I think they\u2019re fools. That\u2019s not what\u2019s going to happen. All that the Fed is going to accomplish is they\u2019re going to reduce the damage, okay, and slow down the damage. They are not going to fix the economy.<\/p>\n\n\n\n<p>The Fed cannot fix the economy. They can prevent damage and they can slow the rate of damage down, but they cannot stop the damage and they cannot erase it. It\u2019s not like you take a pill and you get better. All the stuff that you\u2019re hearing on TV about \u201cIs the bottom in?\u201d \u2013 that\u2019s crazy talk. And all this talk from experts saying, \u201cOh, I was around in \u201987. It was a great buying opportunity\u201d \u2013 that\u2019s true, \u201987 was a great buying opportunity, but there\u2019s an entirely different situation. \u201987 happened for no reason. It just happened.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Crash happens for a reason<\/h2>\n\n\n\n<p>This crash is happening for a reason. The market was the most overbought in history in 2017. When that happens, you\u2019re going to get a correction that is deeper and lasts longer than your typical correction. So there\u2019s a reason behind what\u2019s going on now, and there\u2019s nothing that the Fed can do to stop it. The talk on television, it\u2019s really easy to listen to it and conclude that the Fed is going to fix things. They\u2019re not going to fix things. They\u2019re trying to reduce damage, okay?<\/p>\n\n\n\n<p>The patient has cancer. They\u2019re not trying to cure the cancer. They\u2019re trying to make the person die more slowly. I haven\u2019t heard a single person on television talk about that, but that\u2019s the goal of the Fed. I keep hearing, \u201cThe Fed is going to fix everything.\u201d The Fed is not going to fix anything, okay? This problem is a bigger problem, and it\u2019s going to last a lot longer than what people think.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Second problem: Overbought market<\/h2>\n\n\n\n<p>And you get two problems, and that\u2019s another thing that nobody\u2019s talking about. You\u2019ve got two problems. You\u2019ve got the short-term problem, the pandemic. That\u2019ll last a couple years. But what happens if 4 years from now, 3 years from now, we\u2019re still not anywhere near the high? Then are you still going to blame the pandemic? No, because the problem is not the pandemic. It\u2019s the second problem: the market was the most overbought in history, 2017, and you\u2019re probably going to be in a Trading Range for a decade.<\/p>\n\n\n\n<p>Price got too far ahead of fundamentals. It\u2019s going to take more than a couple years of sideways trading for the fundamentals to catch up to price. It will take a decade, and that is the fundamental problem. That is the fundamental problem. That Buy Climax in 2017, that price had never in history been that far ahead of the fundamentals, and it\u2019s going to take a long time of sideways trading before the fundamentals catch up to that price. <\/p>\n\n\n\n<p>Am I right? We\u2019ll find out.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>Trading room commentary: April 1, 2020 Commentary: Depression? Recession? Where are we heading?Video duration: 8min 7sec The market is going lower Remember I said on the 60-minute chart [last week] that I thought we had to go lower. I thought we really needed to get to this low or a little bit below, and maybe [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":98830,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[249,246,247,248],"class_list":{"0":"post-98817","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ask-al","8":"tag-coronavirus","9":"tag-depression","10":"tag-federal-reserve","11":"tag-us-congress","12":"entry","13":"override"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2020\/04\/Ask-Al-Recession-Depression-Screenshot.jpg","author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/pt-br\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/98817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=98817"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/98817\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media\/98830"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=98817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=98817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=98817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}