This Bull Run Has An Itchy ‘But’

2020-08-20

Major market indexes once again pushed higher and fueled a bull run that seemingly ignores economic hardship and political turmoil.

The past couple of days have seen some excitement with the Fed meeting notes and higher jobless numbers creating choppy trading conditions. The market acts like it wants to switch direction, but then it continues pushing higher.

So what happens next?

This market environment creates an itchy feeling that negative momentum is brewing and this bull run has a big “but” coming... in due time.

But not yet.

Until, and if, reversal red flags are clear, riding the rally has proven profitable (as documented in the gains taken in recent months and days by traders in the Simpler community).

Expectations among Simpler’s traders are that this bull rally is going to keep climbing, even if it experiences recurring pullbacks.

Segments of the market could appear even more erratic with possible pushes to more new highs, pulling back, and then breaking through again for a continuation of the run.

Any noticeable momentum change could offer buying opportunities for when the market recovers to continue its upside run.

Some analysts anticipate the market has another 7 percent of growth on the way. Since the pandemic crash in March, this is the shortest recovery in history with no real downside in sight.

Can the market keep rising uncontested through the end of the year?

Wild card scenarios, such as no more stimulus infusion, delayed Covid-19 vaccine, and the presidential election, could flip this bull on its backside.

Simpler’s traders don’t want the market to crater, and aren’t looking to short what the market is showing. But decades of experience with such an extended environment reveal it’s possible the market may take a break from its run, especially with one of the outlier events mentioned above.

Traders can stay in this market with a day-by-day plan to pursue what the market offers.

Until something definitive changes in the fundamental signals, we’ll stick to the plan of not rubbing this bull the wrong way.

We Saw: stock market maintaining the bull run — 

  • All major indexes climbing
  • TSLA capping $2,000 mark
  • Nasdaq tech darlings all gaining 1% or more

We’re Watching: as this bullish run climbs higher —

  • What happens leading into, after TSLA stock split
  • Those “itchy” internal signals and outlier market influences
  • Déjà vu? Setups in: NVDA, TSLA, AMZN, SHOP

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