7th April 2020 was an interesting trading day for the Dow Jones (DJIA), and one for the history books! Interested to know why?
7th April 2020 was the second time in almost a century (since the 1920s) where the DJIA was up more than 4% and closed negative on the same day. The only time this occurred was on 14th October 2008. Similar observation also for the S&P 500.
Not predicting the future but the market took almost six months since October 2008 before the low was reached and lost close to another 25%.
How did our AlgoMerchant robots (Viki, Trident & Orion) do during the period – no trades were made. Why? It is just too speculative for the robot to make any trades during the day. We do not want to go long or short and to be caught out by a sharp reversal in days to follow. Sometimes no action is a brilliant move, especially when the market’s direction is less conclusive and the robots found no statistical edge from making any trades. In a way, it is vital to minimize the risk in any situation. So you don’t have to be worried about the robot or making any rash act, because the robots know market’s sentiment well and you don’t need to switch them off, because they are probably smarter than what we think!
