Mish's Market Minute

The Market Runs Rich


The market begins to show some overexuberance as we head into earning season and the election date closes in.

Amazon (AMZN)'s Prime Day and an Apple (AAPL) event are scheduled this week, with other companies, like Target (TGT) and Walmart (WMT) joining in with their own sale events to compete. This could make for a push in the retail sector (XRT) as companies gear up for an increase in online sales.

Along with retail, the homebuilders sector (XHB) holds a 76.39% gain over the past 6 months. This sector has grown with the pandemic, as many who are working from home now have more free time and incentive to upgrade their home/workspace.

It should also be noted that MarketGauge's Risk Gauge has remained bullish.

The VXX short term volatility, which is used as a fear indicator in the market, broke down last week as the market rallied. Today, VXX showed small amounts of movement taking more of a complacent stance.

Regional Banks (KRE), which has been considered the weakest link, awaits the start of earnings season, with the big banks up first.

The bottom line is that, while tech made a huge run today, banks have stalled and energy continues to drag. The market is shrugging off all negativity as the stimulus has yet to pass, the divide of the country grows with the Supreme Court confirmations and COVID-19 continues to spread.

We reached a target in our quant model today for the NASDAQ. Additionally, we reached profits in emerging market positions, along with a stock in consumer discretionary. And that is the point -- taking profits into the euphoria makes sense. Tightening stops on all positions makes sense. And watching to see what the dollar does, plus whether the EU goes the way of negative rates, also makes sense.

In a house of cards, volatility can happen at blinding speeds.

Here is a link to Mish's appearance on "Market Overtime" with Nicole Petallides this past Friday, talking Portfolio Rebalancing: https://tdameritradenetwork.com/video/rB4AoXUNF1GBdQ9JzisBqQ

  • S&P 500 (SPY): Watching for a test of September high of 358
  • Russell 2000 (IWM): Coming into resistance at 169-170
  • Dow (DIA): 280 support, resistance 292
  • Nasdaq (QQQ): 280 support, 289 resistance.
  • KRE (Regional Banks): Resistance at 40-42; 38 support
  • SMH (Semiconductors): 184 support with new all-time highs.
  • IYT (Transportation): Support 207
  • IBB (Biotechnology): 137 support, resistance 146
  • XRT (Retail): 53.50 needs to hold and needs to clear 54; could see another push up with many online sales happening this week

Mish Schneider


Director of Trading Research and Education

Forrest Crist-Ruiz


Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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