When the Hull Tactical project was created after the Global Financial Crisis, it was often dubbed “Avoiding 2008” by the employees. We are just as disappointed as our investors that we have not been able to avoid the sharp sell-off of the last few weeks.
Our approach has been and remains completely systematic. Our Daily report shows which indicators are driving our signal and how they contribute to our daily S&P 500 exposure. We will continue our completely systematic approach believing that, in the long run, this approach will prove valuable.
Although the COVID-19 virus will cause significant disruptions, we are confident that the markets will recover. A pressing question in the minds of many of our investors at the moment relates to the speed of recovery and expectations for the timing of the market bottom. In the absence of economic data, the current sell-off is driven mainly by sentiment and coronavirus-related news. Therefore, the turning point may occur once the public feels more confident about the ability of the healthcare system to manage the pandemic. The Worldometers website is widely regarded as a good source of up-to-date information. Our sense is that as the second derivative (change of change) in new cases and deaths turns negative and stays negative for two consecutive days, the bottom will have likely been reached. In other words, we will be looking for two green bars in a row, especially in the Change of Change in Deaths reading.
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