Weekend Nov 1, 2020
Apple and MSFT are 43% of XLK. This looks like the overall market, no wonder, and this is why the markets were down this past week. The FANG stocks are over sold but I don't know that means they rally, especially with the uncertainty of the election and then then the outcome which could take quite some time.
DIV
DIV is the dividend paying ETF comprised of big dividend paying stocks. This is another proxy stock for the entire market. Notice the MAs are converging, always a sign of a coming trend change. Notice it has not been able to rise above its 200 day MA. None of the component stocks yield 10% but DIV does, leverage is involved. So expect the price to fall faster than the market once the sell off really gets underway.
Long Term Road Map
The March 2000 top was also a celebration of the then newest high tech - the dot.coms. There were dramatic sell offs and dramatic rallies.and we already have such a patter forming with the Feb-March sell off and then the March to Sept rally. Another sell off has now begun. If in fact this is the road map, it will be important to avoid being wedded to one view bull or bear of the market. If we have mixed representation, Republican Senate, Dem House and that would offer the opportunity for lots of reversals.
SPX
The area outlined in red is about 50%
that may be a good spot for a low. If we have a contested election, safe bet, expect some dramatic plunges and rallies.
Bonds
TBF A Bear Bond Fund
IN like fashion the bear market in bonds is getting underway. TBF is nearing a breakout above the 200 day MA. We believe TBF is a long term hold. Add shares on a dollar averaging basis.
TBF Long Term
Rates will likelly rise much faster than they fell. That is always the case and much more likely given the numerous debt defaults on the horizon.
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