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Improving but . . . . November 6, 2020

Posted by Tom in Thoughts.
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Nov. 6, 2020 – The (US) markets hit a swing low on Tuesday, Election Day, then promptly rocketed higher on Wednesday & Thursday. Friday was a near “wash” with not much movement higher.

OK, what next? As we approach the previous high (12074 on the NASDAQ Composite) we can expect hesitation. After all, is everything now back to the highs in early September? Virus cases are up at new highs and earnings going forward are “if-y” at best. Are retail sales this holiday going to be strong with unemployment so high? Perhaps the post election move was a relief rally and Friday was a time to “ring the cash register”.

click to enlarge chart

One of my market models turned Bullish on Wednesday, the other on Thursday (both not shown), but they tend to be aggressive on calls. I did do some minor purchasing late last week, but I prefer to wait until Monday afternoon to see what & if there is follow through. So this will be short.

Sector Strength – Short Term:

Select Commercial Services, Semiconductors, Metals & Mining and Healthcare seem to be the best areas to be in now. Tech in general is improving though Friday looked very “if-y” (there’s that word again). If we are truly back on track we should know early next week. And a good practice is to scale into a position(s). No need to jump in with both feet, there will be time. I didn’t close out everything during the market drop so rebuilding positions should be a matter of filling out the portfolio with stock leaders within sector leaders.

Time to digest the past and look toward the future. Have a good week. ……… Tom ……..

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

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