Whats next in the market

NOTE: Also READ COVID-19 thoughts.

Today I am just going to post my thoughts, I won't spend the extra time to put in links.
I really like to put links, to enable you the reader to read my source and help you challenge me or yourself on conclusions.

The market fell HARD this past week,  who could have possibly seen it was time to sell the market? (Click)
Back in 2008, who could have seen that coming?    If you pay attention, its possible to see.

So here we are, whats next?

Anything is possible, the run up for the last 3 years was built on 'free money' through tax breaks, very low interest rates, and a Federal Reserve Bank that has purchased 4.5 Trillion dollars in debt to basically make it 'go away'. 

Now that we are seeing a crack in the market, slashing 1% really is not that much, with rates so low.  More tax breaks?    We could make it free for anyone with over 100 million dollars, but I doubt that is enough.  Cut all taxes for the country to zero?  There is the problem of who then finances USA lifestyle.

So only thing left is for the Fed to just buy buy buy.    The Japanese banks now own 80% of their equities.  So why not have the USA take our capitalist society and instead of giving services to the poor, just spend capital buying securities for the top percentages of society?

So the fed can announce anything, at anytime to help get a shock to stop the drop.
This WILL happen.  Only if you are in the top 0.01% will you know when.  Rest of us is waiting to hear.

My bet is the FED will launch when the SPX passes below 2600, but before cutting through 2490.  See graph below.

We may counter rally this week without the FED doing a major offense.  I just don't think it will last if it does counter rally.   Because of the 10 year run up, there is very low number of shorts out there to buy to take profits to help sustain a buy back.

Then once the Fed launches, we counter rally (again?), we'll get to about 3,000, probably crack it above it a little.
Then some zig-zag, then we go down again, terminating at SPX 1600-ish.   I think then the final missile fires from the FED and the US government, and we'll bottom out.
This will take year or two to play out.  Once the bottom hits with FED and US government launching something extreme, then we are onto the next phase.

All of this will be blamed on COVID-19 and "Feel the Burn" sanders.  But these are just scapegoats for fiscal insanity since 2009.  Granted, COVID-19 has real economic impact, but this event is an accelerator for a fragile global economy build on free money.

The gyrations will continue for years with the central bank giving up all sense of fiscal sanity, with a termination of a global currency crisis.  Gold will be the rocket of all rockets and then I have no idea whats next.  Probably making gold illegal to own, or some other restriction, then turning the reigns over to Bitcoin or other crypto currencies.  Maybe Facebook, USA, Google, Amazon, or bitcoin with the decentralized currency play.

Anyway you slice this, not a great place for a 401k.   Good luck!

Update 3/2/20
Global Recession now baked in the cake