Weekly Briefing 11/1/20 - The Forecast

Weekly Briefing 11/1/20

Weekly Briefing 11/1/20

Expect wild 1000 points swings this coming week as the US elections unfold. We have recommended for many weeks for our members to trim positions and raise cash into the volatile election period. We will show three equity charts which we feel will lead the market higher into the first half of 2021. Buying in real time on pullbacks, corrections, and mini-crashes is often easier said than done.  Picking exact bottoms is very challenging – even for the best on Wall Street. We recommend focusing on the top sectors that will continue to lead this bull market.
The Fed did not expand its balance sheet only to stop halfway through this recovery. They are not about to let the markets collapse back to Covid levels and have to pay for the same real estate twice. You will not see a national lockdown again regardless of who wins the election.  Our economy will proceed forwards. Look for Dow 25,000 to hold any quick decline, but we would favor adding the NASDAQ, biotechs, and semiconductors on any mini-crash event. We are not forecasting a crash, but if extreme support is tested, one should have a shopping list of strong equities ready. You may not pick the exact bottom but there is no need to be perfect.  We are in a bull market and time will correct all entries. If one were to look back at the March selloff and you bought risk assets in mid-March or the exact low on March 23rd with us, you did very well. The market will never be a game of perfection.

Of the three sectors listed, by far semiconductors are our favorite and normally strike a bottom days before the broad market. Watch them closely. They are digging in here and may not go much lower.

Biotech will remain strong regardless of Covid. It is a sector that will help lead markets higher into the next decade as new advances  in modern medicine occur.

 

In closing, everyone is calling for a crash in November and for that reason you will most likely not get it. Virtually no one called for a March crash and we got one. The herd is seldom right. In 30-45 trading days  after markets have started the next strong advancing cycle, we will start to hear how bonds are a dirty word and fiat currencies of the world are headed to near worthless levels as money  pours into risk assets. Have a short, medium and long term investment plan but focus on the medium term trends in November to make money off of this volatility. Remember this briefing in March of 2021 when you look back and see how far asset prices moved since the election chaos.
The Forecast


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