When can you catch a bounce?

According to a thought-provoking article on Market’s Live Blog on the S&P500 futures chart, some buyers might be buying S&P500 futures this AM on the premise that after four big down days then a correction is due.

Coronavirus is getting worse

The spread of the virus is much worse now. We have new cases popping up everywhere and my gut instinct is that this is now definitely going to be a global pandemic. We can’t see the Olympics or the Euro’s going ahead and we are in for a rough ride. One US CDC official was on the wires saying that it’s not a question of ‘if’, but ‘when’ it becomes a pandemic. However, markets do not fall in a straight line. For those long term equity investors, we are getting some low levels to load up on longer-term longs. Nice. So, if you have a 10+ year framework, there are nice bargains ahead and set to get cheaper.

When to take a bounce?

The thrust of this post is to ask the question, ‘when do you take a bounce from a large fall?’ We were looking at the S&P500 yesterday, tempted to take a long. We are not tempted now as the market mood is firmly down, but we were at least looking for some kind of reversal from the stochastics to indicate a turning point alongside some softer news. Otherwise, it seems that you would just be trying to catch a knife. So, how about you? What will you need to potentially buy into these large equity falls? Do you have a rule of thumb that you go by?