Fear of missing out appears
Many equities are pricing in a depression and a high risk of insolvency. These are dark times but you hate to bet against humanity, central banks and fiscal firepower. Everyone wants to buy-the-dip, eventually.
I saw something yesterday (unfortunately I can't the source) that said yesterday's equity selling was dominated by retail. They're usually the last ones out the door and sell right before there is a bounce.
Sure enough, equity futures were limit-up and now at +4%. The beaten up currencies bounced today and the gold trade is finally working. Even in a global pandemic, nothing goes in a straight line and bear-market bounces are epic.
If I were to sketch out a game plan, I would expect to see a strong open then a dip about two hours into the trading day. That's when case numbers from New York come out and that's the center of the outbreak right now. Yesterday's numbers were out at 1515 GMT (11:15 am ET).
The market will also have to deal with the Markit PMIs for both manufacturing and services at 1345 GMT. So far some of the dire numbers from Europe haven't shaken markets so that's a good sign.
Ultimately, every bounce is a test. I think we're set up for one that lasts the day but the indications in the commodity currencies right now aren't great. You also hate to bet on Congress at any time.
If we can't hold onto this rally, I think we're on the verge of a disorderly washout; even moreso than what we've had already.
