Technically Speaking: October Edition

November 4, 2020

with Dean Greenberg

Long Term Resistance : 3550

Long Term Support: 2950

The markets continued to decline in October. Investors’ attention is focused on the election. As mentioned in previous newsletters, we have been raising cash. We wanted to be in a position of having cash if the markets drop and still having the ability to profit, albeit at a lesser degree, if the markets rally. Whatever the election outcome, I expect volatility. If investors sell the markets after the election we will be looking at support levels of 2950 – 3200 to be buyers. If we rally, I would expect it to be a sugar high until reality sets in that the economy is actually struggling and then the sell off. The markets want a definitive winner. Any confusion as to a clear winner and lawsuits postponing the outcome will make investors uncomfortable. Again, any big decline will be a buying opportunity. Stimulus promises and sizes will be determined by who controls the power. Democrats will want a large stimulus package while the republicans are concerned about the spending and debt and will offer a more targeted and less aggressive stimulus package. Fiscal policy, especially Tax increases or decreases will have a huge impact on earnings and the economy. Buckle up, the next few months could be volatile.