Just a Corona Correction? Harry Dent | February 26, 2020 The markets on crack have largely ignored the coronavirus, which obviously could be a potential game changer. And now they react, down 2,600 points on the Dow, as soon as it hits a "white toast" country like Italy. Yes, the markets are quite bigoted! The markets have been on a tear ever since the Fed started pumping money feverously due to the repo crisis, and have continued with the coronavirus. That has stalled for now, hence I expected a correction here… But it's gone about as far as it should if it is to not break that strong final thrust that started in early October, looking very similar to the one from October 1999 into March 2000, in the last great tech bubble peak. The Nasdaq chart shows a still clear channel if we don't see the market break down much more than another 1%. [Click to Enlarge] My two best short-term cycle guys are looking for a correction bottom between late February and early March. I've noted the bottom of the channel trendline as of March 4, the day after Super Tuesday, where Sanders' strong lead may become more confirmed. A shot at a balls-out socialist winning is "game over" for this bubble. The Nasdaq needs to hold around 8,800 near-term and 8,825 by March 4 to hold this channel convincingly. If so, it should continue up and see 20%+ gains by late May, the first likely turning point, and 33%+ by the election if it lasts that long. This recent advance looks like the third wave up, and what's going on now looks like the fourth wave correction. If the fifth wave is the same length, that would take us into late July or so with a target of 10,900+. Note that the final wave tends to have a "throw-over" rally above the channel before it collapses. That means we could see the Nasdaq as high as 12,000+, a 35% gain from here. [Click to Enlarge] The S&P 500 is similar with even a tighter tolerance down to 3,080 on the downside near-term. The targets by May would project 15%+ returns and by the election 24%+. Hitting 4,000 would be a good top-end overthrow target, a 30% gain from here. The tech stocks – and more so, the FAANGs – should continue to lead if this final orgasmic phase continues. If, instead, the markets break down too much further, another 8% to 10% downside is likely and a top in place becomes more of a possibility. Harry Dent This Week in Economy & Markets... All Hail the Mighty Dollar… Or Not Rodney Johnson | Feb 25, 2020 There's always some old relative who, when you ask how he is, says, "I woke up on the right side of the grass, so I must be alright!" Kind of funny . . . the first time. Then it's just another non-reply that doesn't answer the question. If the only choice was being dead or alive, we wouldn't ask. The answer would be obvious... READ MORE » The Coronavirus Goes Global Rodney Johnson | Feb 24, 2020 When such a deadly virus hits, the first stage is always containment, as has occurred rapidly in China. But when it starts to spread past its origin more rapidly, it gets a life of its own. At this stage of the coronavirus's spread, it's better to focus on mitigation through sanitation and less direct social contact. Governments should support businesses and stop closing things down to make the economy and panic worse.... READ MORE » On the Markets: Stay Skeptical Rodney Johnson | Feb 21, 2020 Our eyes these days are on the Fed's balance sheet, and they'll continue to be, as we march forward through this repo and coronavirus crisis. What we're seeing is a slight easing back and now flattening on repos, but the Fed's still buying Treasury bills. That all combines to a mild positive for stocks, but it hasn't been enough to show the likely next big surge quite yet. Keep an eye on... READ MORE » Drowning in Student Loan Debt Rodney Johnson | Feb 20, 2020 The federal deficit reached just over $1 trillion last year, is expected to top $1.3 trillion this year, and will likely be at least $1 trillion every year for the rest of the decade. And that's if everything goes right. Throw in a recession or unforeseen circumstance (cough, coronavirus, cough), and things could get worse. Which makes me wonder... READ MORE » Economy & Markets  |  Dent Research You are receiving this e-mail as a part of your free subscription to Economy & Markets E-Letter. Remove your email from this list: Unsubscribe. To cancel by mail or for any other subscription issues, write us at: Charles Street Research Attn: Member Services, 819 North Charles Street, Baltimore MD, 21201 | Phone: 888-211-2215 | Fax: 410-223-2682 LEGAL NOTICE: Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the worldwide web), in whole or in part, is strictly prohibited without the express written permission of Charles Street Research. This work is based on SEC filings, current events, interviews, corporate press releases and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. The information herein is not intended to be personal legal or investment recommendations and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Click here to view our privacy policy.