If we compare 2020 to 1987 and 1929, both considered market crash years, we can see that the extent of the current down leg off the peak (and it may not be over yet) has been -36.02% in 25 trading days off the peak as measured by the Dow. In 1929 the market collapsed -49.4% in 52 days, and in 1987 it collapsed -41.16% in 41 days.
In terms of sheer velocity, however, the Crash of 2020 makes 1987 and 1929 look like child’s play. In 25 days off the peak, the Dow was only down -5.47% in 1987 and only -10.41% in 1929. Today, if it isn't nailed down, they are selling it, and for now there does not seem to be any relief in sight, despite the Fed throwing everything but the kitchen sink via trillions of dollars in fresh QE. The Fed balance sheet, as of Thursday night, has now reached a record $4.7 trillion.
For now, cash is king.
The Market Direction Model (MDM) remains on a SELL signal.
The coming week's economic reports start with Monday's Chicago Fed national activity which tracks economic activity in the 7th district, which is comprised of Indiana, Iowa, Illinois, Michigan and Wisconsin. Expect surprising levels of weakness which could prompt a market gapping lower on Monday's open. Countering this would be any positive news on the corona containment front which seems more distant with each passing day.
The first panic selling wave was due to exponential rise in coronavirus cases. The second panic selling wave will likely be due to the massive amount of damage done to the economy due to lockdowns, quarantines, and supply chain disruptions. A third wave of panic selling could be due to the infection rate not leveling off as the weather turns warmer. Since the virus is brand new, Harvard Medical School's coronavirus resource center said, "At this time, we do not know whether the spread of COVID-19 will decrease when the weather warms up."