The 60-minute charts of /NQ, QQQ, & SPY below list some bounce targets for what I am going to call the Corona-Fatigue Rally. What I am referring to is a collective numbness of the general public to the constant barrage of negative headlines on the Coronavirus, even if it is only relatively short-lived. I expect the CFR will begin this week, most likely today (my preferred scenario) with the possibility (alternative scenario) of one final wash-out thrust down to put in a divergent low on the 60-minute time frames of SPY & QQQ. Both scenarios entail a rally of about 6%, at minimum, from where the index futures & ETFs are currently trading in the pre-market session.

I’d like to wait & see how the markets start trading after the opening bell at 9:30 am before adding any new official trade ideas although an official long trade on crude oil will be at the top of that list as /CL went on to break out above that 60-minute price channel highlighted last week (after reversing off the long-term support that was also highlighted). As crude oil tends to trade in line with the stock market, my scenarios are essentially the same with a preferred scenario that crude put in a near-term bottom last week with a rally up to the 49.50ish area (8%+) from here likely or one final wash-out thrust down to put in a divergent low on the 60-minute time frame before a substantial rally (alternative scenario).

CL 60m March 2nd

CL 60m March 2nd

While I wish I could say with the utmost degree of confidence that my preferred scenario or even my alternative scenario, for that matter, will play out, I do think that we should have a good idea today as to whether or not the market has put in a near-term bottom. Right or wrong, with volatility still extremely high, it is best to keep position sizes relative light to account for the above-average gain & loss potential or stand aside if unsure of how to be positioned.