XLK Correction into Late Spring

2 more months of declines could be seen into the late spring. This corresponds roughly with the timing of the last correction and when flu season will likely end. Given the velocity and severity of the recent decline, getting a ~25% correction in line with the last correction in December 2018 seems likely and exceeding the magnitude of that decline is also a significant possibility. A slowdown in business activity caused by precautionary measures could very well be what history writes as the start of the next recession, which was projected to happen given the already existing slowdown in GDP growth. The perception of the high likelihood of a recession in and of itself warrants a significant discount to current prices. Selling will continue as people decide whether the impact of the virus is priced in or not, but as news of the virus spreading continues it will likely be challenging for XLK to find a footing.

Komen:

Wait for a bottoming pattern to emerge before restarting to buy.