SPY likely to move toward bottom of channel

I think we're likely to see a correction in the S&P 500 to at least the bottom of the channel, if not lower. On Tuesday the S&P 500 hit 19 forward P/E, making the index the most expensive it's been since 2002 (18 years ago). In effect, the S&P is priced as if there's zero risk in the market right now. Of course, we all know that's not true; between coronavirus and record public and private debt, there's lots of risk out there right now. We've been borrowing money to juice the economy for years, and coronavirus may bring a reckoning.

A huge, long list of companies has issued negative earnings guidance or warnings of business disruption due to the virus, and more companies are likely to do the same next week. Analyst firms will adjust their forecasts and price targets based on companies' guidance. Analyst firms are also sounding warnings that coronavirus's macroeconomic impact is underestimated or that it may cause disrupted companies to default on trillions of dollars of debt. Frankly, we're long overdue for a price correction, and it's ridiculous for the S&P to be mid-channel with so many headwinds. I don't really like to play short, because the market usually goes up long-term, but for those who do play short, now would probably be the time.
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