Model switches to CASH/NEUTRAL.
The uncertainty that prevails concerning a number of key factors suggests cash is the best place to be for now in terms of market timing. While a stimulus package is long overdue, such stimulus has become more politicized than ever with this week's impending Presidential election. Whether Trump or Biden wins, more stimulus is coming. It is just a question of when the next stimulus package is passed. Once such occurs, the model will look to price/volume action in the major averages and leading stocks to confirm its next change in signal.
But in the meantime, adding to the opaque situation is the election outcome which may remain uncertain even after the election is over should Biden win and Trump demand an investigation. Should such occur, a sharp, short correction in the major averages would not come as a surprise. Even if Trump concedes defeat without a fight, Biden is bad for both the economy and stocks with his higher tax plans which could weigh on the major averages, though a firm conclusion to the election could spur a rally as markets hate uncertainty.
Market Direction Model - Model switches to CASH/NEUTRAL on November 2, 2020
|2 Nov 2020 09:13 ET
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