Last week we said, “The markets are short-term overbought with bearish sentiment and deteriorating breadth.  The put call ratio is showing too much euphoria, which is a big warning sign to us.”

We warned in last week’s letter not to get complacent.  That was great advice as the markets sold over 2% on the week over of the expanding threat of the coronavirus.

Bonds rose and prices of economically sensitive commodities plunged.

Many stocks and ETFs now have damaged daily charts, suggesting lower prices until our market internals get oversold (as we have been predicting).


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