In an UNPRECEDENTED move, the Federal Reserve just slashed interest rates a full point, the closest to 0 since the Financial Crisis. They also announced a massive $700B purchase schedule of assets, better known as Quantitative Easing (QE).
How did markets respond to this huge news? By immediately tanking as markets continue to panic, going limit down and halting at 5%.
The biggest banks in the US (JPM, BAC, C, MS, WFC and GS) all suspended stock buybacks in order to utilize that capital to help the maximum amount of small businesses during this panicked time.
With businesses, schools and arenas suddenly closing across the US, and Europe getting closer and closer to full containment, we are due to see a great economic impact to Q1 and Q2 earnings as we are experiencing a true Black Swan event in the market.
What a time to be alive.
I'll be back in the saddle this week navigating the markets with you guys. We have to continue to remain flexible and I personally will continue to operate on the shortened time frame. You almost have to do the opposite in times like this when volatility is so high. You have to look to buy stocks on the rebound when they look the worst, and look to take profit when they're beginning to look good --- not looking to buy them when they're looking good as in 'Trending' times.
PS - I cannot stress enough that if you are trading right now, you should be ridiculously small right now. The moves are fast and violent so small size can still yield some great trades in this volatile environment. Most importantly, there is no need to kill it when the market is this bipolar.