The Shakedown 10/25/20

Click the pic to BUY BUY BUY!

LAST WEEK, S&P 500 (+0.13%)

Monday: -1.52%

Tuesday: +0.40%

Wednesday: -0.19%

Thursday: +0.55%

Friday: +0.34%

We got another choppy week in the market as we continue to wait out the stimulus talks as well as the upcoming election. All the market really did last week was consolidate, and if you're too active during a period of chop, you're likely going to be very frustrated when all is said and done. That's largely what we got last week with a few bright spots mixed in. We're now 7 trading days from the election which is such a huge market catalyst that there isn't much of a need to be over-active until that major headline is behind us. There are definitely still trades to take, but this isn't a max-risk-on time, no matter how things are setting up, just due to the headline risk.


Earnings season really got under way with 300 companies having reported. SNAP was the big winner of earnings last week with NFLX getting taken out to the woodshed. We have something like 700 companies reporting next week so it's sure to be a busy one on the earnings front.


If we weren't facing the election the week after next I would be pretty bullish after SPY's action last week. While the last two weeks have been choppy, if you couple that information in with the 4 weeks of gains that preceded the chop, it's looking like a really nice flag to me. Of course, in the hypersensitive headline driven market things can change at any instant with some news hitting the wires.


From a personal opinion standpoint, I don't think the outcome of the election will have as great an effect on the macro outlook of stocks, at least as much as the headlines will have you believe. A Trump win is the obvious bull case with his affection to the stock market and Biden would be the bear case with his desire to raise corporate taxes and individual taxes on high earners. With the Fed's historic backstop of printing money and literally buying equities, I don't see this market slowing down in 2021. I'm actually very excited for the year ahead with the way things are setting up: Fed backstop + economic recovery + tons of cash sitting on the sideline seems VERY bullish to me on a long term basis. If Biden wins do we initially sell off on the prospect? Could be. But on a macro basis, looking out months ahead, I remain awfully bullish. We just have to get through the rest of this year.


(PS - see how I can objectively speak on politics without letting an opinion get in the mix, learn somethin'! :)

Earnings Season in Full Force this Week

Click the above picture for a full list of the companies reporting this week

KSU Long

Super tight bull flag in KSU as money flowed to transport stocks all week. It gave us a nice inside week to give a clear entry point through 186/186.50 area next week.  Would love to see an intraday bullflag form in that area. 

Trigger: $186/186.50

Stop: $179.89

Target: $210+

Click Below for this week's Watchlist

Hope to see you in the chat Monday!

Leave a comment