Hey Market Pilot,
I don’t think it is much of a surprise to most of us to hear that Omicron, a new Covid-19 variant, has made it to the shores of America. By the time we discovered and heard about it from Africa, it was already on the other continents. It was simply a matter of detecting it.
The markets are not liking the one-two-three punch of non-transient inflation, and now Omicron in the U.S. The S&P 500 (SPY) has been dropping straight to its daily 50 simple moving average (SMA) which has actually been my target ever since SPY price crossed the daily 50 SMA on its way up. I just didn’t know what the news was going to be to help get it there.
The market is always fascinating and never short on entertainment. I wondered what was going to help grease the wheels to get SPY down to the daily 50 SMA, and now we know.
I am hypothesizing here, but the Omicron variant is exactly that. Looks like this is a variant of something we have grown to know pretty well over the last two years and learned how to live with the same. It’s scary news right now, and we don’t know how people or our politicians will react to this, which is why the market is selling off.
The market mostly doesn’t like unknowns, and it could be argued that the market knows Covid-19 pretty well and that our economy has managed to survive it. So perhaps we just need more data on Omicron, and then we can get things back on track if it turns out to not be very deadly. Who knows.
-Your Profit Pilot, TG