A RALLY IS OVERDUE- USE IT TO SELL

Up 1,049! Hurrah! Maybe we can get a few more up days in before the new cases of the virus start flooding in. Results from the tests can take a while and also until now, there have been few test kits made available. I expect that for those who were exposed, (airports, foreign travel etc.), new cases will begin to show up in the next couple of weeks and will show an exponential grow of US cases.

WORST CASE SCENARIO: Yesterday’s New York Times Reports: “Scientists tracking the spread of the coronavirus reported on Monday that, for every confirmed case, there are most likely another five to 10 people in the community with undetected infections.” The C.D.C.’s scenarios were depicted in terms of percentages of the population. Translated into absolute numbers by independent experts using simple models of how viruses spread, the worst-case figures would be staggering if no actions were taken to slow transmission. Between 160 million and 214 million people in the United States could be infected over the course of the epidemic, according to a projection that encompasses the range of the four scenarios. WORST CASE SCENARIO:That could last months or even over a year, with infections concentrated in shorter periods, staggered across time in different communities, experts said. As many as 200,000 to 1.7 million people could die.

BEST CASE SCENARIO: If I am wrong and there is not an exponential growth of cases, the markets may go through an early elongated bottoming process (not a V), with a 20,000 DOW IND being the bottom. However, all indications are, that the worst it yet to come.

I continue to worry about the 80% of people who live from pay check to pay check. It looked as though for a while that Mitch and Pelosi were going to get along and pass some comprehensive measures to help these people. As of now, it appears that chaos will prevail and any help will be delayed and misspent.

THERE ARE FIVE GROUPS OF STOCK PERFORMERS (Examples)

Group 1 (Best) only fell to 2019 levels:  Apple, Dow Utilities, Walmart, Netflix and Facebook

Group 2 (Average) fell to 2017-2018 levels: Dow Ind, NASDAQ, S&P, Russel index , Emerging Markets Index, JP Morgan, Caterpillar, Hong Kong Index

Group 3 ( Below Average) fell to 2016 levels: Dow Transports, Russia RSX, Japan N225.

Group 4 (Bad) fell to 2010 levels:  England  FTSE, Germany DAX, General Motors, Wells Fargo Bank. BNP Paribas bank, IBM, Boeing

Group 5 (Worst) fell to 2002 levels and below: Deutsche Bank, Credit Swiss, Barclays bank, Ford, HBC bank,

The big question is, will the performance slide up or down? I think they will slide down as follows:

Group 1 will slide down to the 2017- 2018 levels,

Group 2 will slide down to 2016 levels

Group 3 will slide down to 2010 levels  

Group 4 will slide down to 2002 levels and

Group 5 will slide out of existence or be saved with massive bail-outs.

CARL M BIRKELBACH

3/17/2020

DOW 21,237 up 1046 +5.2%

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com