Has The Stock Market Bottomed Yet?

We are in unprecedented times, most of us confined to our homes for most of the day in an effort to combat Covid-19. Global indices have seen dramatical movements with the FTSE reaching its recent high on January 20th just below 7,700, falling 35% two weeks ago. The index closed today almost 14% higher from the low set back then.

The German DAX has witnessed a decline of approximately 40% from all-time highs set on February 17th. The index closed 25% higher from the low set on March 19th. Finally the DOW Jones index saw a correction of 38% from all-time highs set on 12th February. Currently it is trading 27% higher from the low set on 23rd March. So are the lows set in place or is this just a relief rally?

As it stands, there appears to be almost an equal chance of a further relief rally or a re-test of the lows set recently. Despite central banks and government providing stimulus and much other remedial and preventive action, it is still unknown whether Covid-19 has peaked. Therein lies the great uncertainty.

As most of you are aware, due to extreme market conditions, we have been staying out of the market. Very high volatility and wider spreads prevent us from placing stop losses within a reasonable distance. We prefer to sit on the sidelines, protect capital and wait for the market to stabilize and volatility to reduce before we start issuing signals. Having the foresight to avoid high volatility minimised our losses for March. We managed a return of 70% in 2019 for our PREMIUM service using fairly low leverage. Further performance details can be seen here: Annual Return.

The key aim of our trade signals service is to make a worthwhile return with a minimal time commitment. If followed correctly, no more than 15 minutes per day for the STANDARD service and up to 45 minutes per day for the PREMIUM service.

Although we do not usually cover equities, with pensions being hit hard, everyone has been affected. A few blue chip stocks we can see value in include the following: LLOYDS, BARCLAYS, BP, ROYAL DUTCH SHELL, APPLE and AMAZON. Bearing in mind the bottom may not be set yet, building a small position which you can average into is always prudent

Stay safe during this unprecedented epidemic!