Some Rain on the Parade


Late last year before anyone had heard of a Corona Virus, the monthly mood pattern gave a heads up to a "global crisis mode" for January-March.  In the chart below this is the area marked with a 1.  The pattern that identified such a crisis was the Manic (orange) and Controlled (grey) lines in parallel and close together either condition pointing to a crisis, but this was a double whammy of large scale proportions showing on a monthly scale.  With the orange and grey lines switching positions for April-May (area 2), that pointed to a "government intervention" mode and we've been watching that happen with social distancing, mega dollar liquidity, market, business, and other interventions.  I haven't really been too concerned with the summer as it's been a pattern primarily showing (understandably) people wanting to forget about sickness and dying and serious issues.  However, a flip is now showing as a possibility for the month of June which would turn the currently inverted picture right-side up (Controlled or seriousness dominant).  The area marked as 3 for June - July, once that reversion to normal were to kick in sometime in June, would point to at best the doldrums of summer, but could easily be pointing to a new surge of serious concerns with the virus, with the government, or something else.  While this doesn't have that same "crisis" signature that January - March had, it certainly doesn't look "cheery."  The market saying of "sell in May and go away" is probably good advice to be heeded this year.

Dr. Cari Bourette is an analyst at ElliottWaveTrader.net, where she provides her proprietary market mood analysis in our flagship service, "Avi's Market Alerts."