Fear of contagion is real amongst traders sending stocks lower. Where this market heads next is anyone’s guess it has paid to have a risk management strategy. Cutting your losses and proper position sizes have helped tremendously. Even hedges have helped quite a bit. It is hard to believe we are still at the same spot the market was at back on October of last year. However, there is real fear amongst market operators this could get much worse. We can only control our actions and how we operate. Let the pundits do their thing and we will do ours. It will take some time to sort this out. Be patient with the stock market and avoid the need to trade just to be involved. Downside risk remains real and we will be patient with our trades.

Given the rise in the VIX and put/call fear is real, but have we seen the worse of it? Many are searching for this answer and many will not find the answer they are looking for. AAII Bears jumped higher as Bulls plunged. Neither are at extremes and given where the survey ended both groups can get to extreme levels. NAAIM exposure index sits above 60%. Not what you would expect after we began this week. Surveys aren’t great indicators, but they provide a reference point. We certainly can go lower and it would not be a surprise if we did. Pay attention and manage your risk properly. Better odds will come our way. Remaining patient will keep us from churning our account. No need to throw away capital.

We will continue to keep calm and poised. You never know when the next opportunity will present itself. Panic over the Coronavirus will continue for a bit. No one knows when or how governments across the globe will solve this issue. Control your controllables. No need to put your energy into anything else.

We hope you have a great weekend.