Good Questions but Poor Answers

The economic calendar includes several important releases, but few reflect the COVID19 effects. Everyone knows the economic news is dismal. Just how dismal does not seem to matter.

Investors want to know whether we have seen the bottom in stock prices. They ask, “When will people return to work?” Is it time to start buying stocks? If so, which ones? Serious market observers are discussing letters representing the future economic path: V, U, L, or W. (I wanted to create a memorable acronym from these letters and sought help from Mrs. OldProf. She admitted that some help from Vanna would be needed).

These are all good questions, attracting plenty of attention and many answers. The problem?

We are faced with many good questions but only poor answers.

Last Week Recap

In my last installment of WTWA, I attempted to demonstrate the need to understand the complex models diving key medical, economic, and government decisions. There was plenty of discussion on each of the key themes but little effort to show the relationships. The new issue of Barron’s had an article on each! It illustrates the need for a framework.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. This week I am featuring Jill Mislinski’s version, an excellent combination of the most important information.

The market gained 12.1% on the week. The trading range during the week was 9.5%, or 13.3% if we include the closing price from Friday, April 3, in the calculation. You can monitor volatility, implied volatility, and historical comparisons in my weekly Indicator Snapshot in the Quant Corner below.

For an interesting long-term look at daily trading ranges, here is another of the many great chart’s in Jill’s weekly update.