Last week, I shared my concern that a recession would begin within months. Now it appears the recession may have started last week.

I know it’s not easy to precisely determine when the $21.7 trillion economy turns. The last recession began in December 2007, but the official announcement that a recession had started didn’t come until a year later. It took 15 months for the National Bureau of Economic Research to announce the end of the recession in June 2009.

But this time is different. I believe the recession began as consumers stopped shopping as panic about coronavirus accelerated.

By the time you read this, the details will probably be different. But as I am writing, almost every state in the country has declared a state of emergency, with many banning large gatherings. Large cities have imposed restrictions, including New York City, where the mayor is considering a lockdown. San Francisco, along with the rest of the Bay Area has issued a “shelter-in-place” order for all residents. Similar situations exist in countries around the world.

Three weeks ago, this was all unimaginable. Now, we don’t know what will come next.

Less than 48 hours ago, I received an email announcing expanded operations from the Federal Reserve. As I clicked through to read the full statement, I learned the Fed cut the target range for the federal funds rate to 0 to 1/4 percent and increased its operations in the credit markets by another $700 billion, which is on top of the previous $1 trillion increase.

The statement concluded with the announcement that, “In a related set of actions to support the credit needs of households and businesses, the Federal Reserve announced measures related to the discount window, intraday credit, bank capital and liquidity buffers, reserve requirements, and—in coordination with other central banks—the U.S. dollar liquidity swap line arrangements.”

This means the Fed is working with other central banks to stem the global panic. There were similar operations in 2015 when China suffered a meltdown, and the effort was somewhat successful. The S&P 500 lost about 15% during that time.

The Chinese stock market lost about 50%.

This time is different in that the problems are not contained to a single country. Stock markets around the world are selling off, and a global recession appears to be inevitable.

The SPDR S&P 500 ETF (NYSE: SPY) is back to the level it traded at in January 2018. As the chart below shows, the ETF is on a “sell” signal according to my Profit Amplifier Momentum (PAM) indicator on the monthly chart (below).

What This Means

This means the Fed is fighting strong downward momentum in the stock market. That momentum is driven by panic. That panic may or may not be rational — but that’s actually not important. The panic is real, and that can be seen in the market action.

The lower line on the S&P 500 chart represents my initial downside price target for SPY. This is at $237.50, a 30% decline from the high, which would actually be a below-average decline for a bear market associated with a recession.

On average, those bear markets lose 37%. For now, I believe the Fed is fighting to limit the downside for the economy. This will serve to limit the downside in the stock market. However, the Fed has now cut interest rates to zero… so they may not be able to do much more. I’ll be watching closely and will adjust my target as necessary.

While a short-term bounce is possible, we are in a bear market. But the good news is that there are simple techniques we can use to survive — and even thrive — during times like this…

For example, my colleague Jim Fink has devised a proprietary investing system that works in any market. That includes a three-and-a-half-year winning streak in which his followers have raked in tens of thousands of dollars… without a single loss.

Jim just agreed to show 500 smart investors how it all works. And if you want to join his group, you’d better act now because spots are going fast. Go here to learn more.