On Monday, I suggested in This is what the stock market will focus on next the stock market would start reacting to the uptrend in COVID 19 cases.
Indeed, the stock market indexes seem to be reflecting something negative today.
I’m guessing it may be the uptrend in new cases per day. For example, Florida has reached a significant new high.
As I’ve been saying for the past two weeks, the new uptrend breakout in cases per day is NOT driven by more testing. Below is a sample of the states with the highest new cases, and as you can see, the bars show the percent increase in new cases and testing.
This is NOT the kind of asymmetry I like to see.
Considering the elevated risk level in the stock market by my measures, it is likely we’ll see more downside for stocks.
So, we have been positioned in long U.S. Treasuries for over a week.
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