CHLOROQUINE CAN POTENTIALLY TRIGGER A 5000 POINT RALLY IN THE STOCK MARKET $AAL $AAPL $AMD $AMZN $BAC $DIA $DJIA $GILD $INTC $JPM $LUV $MYL $SPX $TEVA $BAYRY

Investors, after facing huge losses amid the threat of the coronavirus, are grappling with what is next for the stock market.

In January, I warned that an external event could cause a major drop in the market. Now it has happened. Something investors need to be on the lookout for: potential treatments that could put a halt to this public health crisis, unfolding economic calamity and stock market rout.

We have been assessing potential treatments. It’s clear that a vaccine would take at least a year. The best hope is finding an antiviral that at least lessens the severity of the coronavirus, much like Tamiflu lowers the severity of the seasonal flu.

We are not infectious-disease experts. Based on our consultations and research, our conclusion has been that chloroquine may have the most potential of several drugs being tried. The data in this journal is helpful.

President Trump has touted chloroquine as a potential treatment; he did so again Friday. For that, he has come under criticism by some for giving false hope. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Friday, standing next to Trump, that chloroquine could potentially be used, though it’s not a prime candidate at the moment.

I won’t wade into the controversy but instead focus on implications for the stock market. Let’s explore with the help of a chart.

Chart

Please click here for an annotated chart of SPDR Dow Jones Industrial Average ETF DIA which tracks the Dow Jones Industrial Average DJIA.

Note the following:

• The chart shows the target zone if there is a positive development on an antiviral drug against COVID-19.

• The chart shows a small bounce in the stock market after the support zone was broken. This bounce mainly reflected a short squeeze and so-called quadruple witching. In quadruple witching, stock options, stock index futures, stock index options and single stock futures expire.

• To learn more about the support zones, please click here.

• Click here to learn about an objective way to call the bottom, as shown on the chart.

• It seems that chloroquine has in vitro activity against the novel coronavirus. In plain English, this means that chloroquine is effective in a test tube.

• There is anecdotal evidence that chloroquine helps with coronavirus.

• There are no rigorous clinical trial results at this time that show chloroquine being beneficial against coronavirus.

• Chloroquine is an inexpensive, old drug that is used against malaria and in certain cases of lupus and arthritis….Read more at MarketWatch.

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