Special Bulletin: October 28, 2020 (11am update)

On the Verge of a Serious Breakdown?

Our Current Market Outlook has been downgraded to “Market in a Correction” with a “red” light. Two of our Core Four indicators are red and two are yellow. This combination signals rising risks and a potentially dangerous outlook.

As of this morning, the key stock market indexes are not holding their all-important 21 and 50 day moving averages. The long-term uptrend line from the March low is currently being violated as well.

While the opportunity for a snap-back rally and a move back to a yellow signal exists, it is unlikely to develop without a major positive catalyst that would remove fear and engender boldness by investors. 

We have been raising cash levels in our strategies. At the same time we are researching likely areas of future leadership and strength based on the election outcome for when an uptrend resumes. Historically, the period immediately after the election and through April can be fruitful for investors. But, there are exceptions, and in the year of Covid we have learned to be flexible to what can happen next.

How should investors respond? Protect capital. Keep calm and open minded for a forthcoming positive catalyst. Build a watch list. Most importantly, VOTE!

Have a Triumphant day! ®