The bottom is in; that is our prediction. The course of recovery depends upon how expeditiously we contain the coronavirus epidemic in this country and to a lesser extent, around the world. Once there is optimism that the end is in sight for this outbreak, activity of all kinds will begin to recover. In the meantime, the economy and many businesses are getting unprecedented help from our government.

The unwinding of levered positions and strategies in the equity markets has taken place. Technical indicators from the market itself have been signaling for some time that, at the very least, a strong bounce was in the offing. One, in particular, is that money flows into equities did not crash nearly to the same extent that stock prices did, a positive divergence in technical jargon. There has been accumulation by strong holders on the way down.

The shape of the recovery, as well as the duration, can’t be known. However, for the patient investor and owner the rewards are likely to be considerable.

Stay steady, my friends.

The Lonely Bull