VRA Weekly Update: Overbought Pullback is Here. Pelosi Blackmail. Election Update.
/Good Thursday morning all. We’re getting the overbought pullback that we’ve been discussing here this week. Yesterdays Internals were mixed to negative with no signs so far that this might get nasty but Dow futures are -330 this am.
Nasdaq is leading the way lower, but losses in the semis were only par with the broad market (Dow and S&P 500). The VIX was just barely higher, a plus, but the VIX is +8% this am.
Whether this turns into a more dramatic multi-day sell off or simply an overbought pause in an otherwise strong bull market, we’ll have to wait and see.
We’re not fans of picking bottoms but I will also say that if we get the word that a big stimulus deal is going to happen, if given the time and if you’re a ST trader, you will want to go very long, very fast. That’s what we will be doing in Parabolic Options.
Again, we remain bullish….but when we hit heavily/extreme overbought levels on the VRA Investing System, discipline wins the day.
Remember our repeating pattern, from the 3/23 coronavirus insanity market lows. The government and FED have consistently used market sell-offs to introduce several stimulus packages. We are waiting for CV stimulus phase 5 now, assuming that Nancy Pelosi cares about her “constituents” enough to get the $1.8 trillion deal done.
In addition to holding the American people hostage over stimulus, Pelosi and the left know that a $1.8 trillion deal would almost certainly take the Dow to 30,000, in short order. Dow 30k cements a Trump win.
If you caught the interview on CNN/Wolf Blitzer with Nancy Pelosi Tuesday afternoon, you saw an on-screen melt-down of epic proportions. It’s worth a Google. Am I now a biased independent that fully intends to vote Trump for a second time? I absolutely am. But, I remain the same independent thinking person to my core, and in no world could I ever vote for the party of Pelosi. The party of “let them eat cake”.
Out of touch doesn’t begin to describe where the lefts base has taken the Dem party, which is NOT healthy for our country…we need a strong two-party system for the important balance it provides. Honestly, If I didn’t know better I would believe that the left is intentionally throwing this election to Trump…that’s how horrible this campaign season has been for Dems.
But I do have some good news to report. The betting odds began to spike “immediately” after Pelosi’s appearance that a stimulus deal WILL get done. Her interview was that unimaginably horrible. When CNN and Wolf Blitzer attack you, along with increasingly loud/leading voices in your own party, you know your position is wildly unpopular.
A stimulus deal…this would be Phase 5…should be at least in the $1.8 trillion range, taking the total for coronavirus insanity to $9 trillion (fiscal and monetary). This would be highly bullish for our markets…most certainly over the first few days of the news breaking. Watching closely!
Presidential Poll Update
Here’s our presidential poll update. First of 3 weekly polls headed into 11/3. Thanks to everyone for voting. And no, I was not expecting 96–4 in this first poll. Tonight we have dueling town halls, with late breaking evidence of the Bidens profiteering from public office now hitting the MSM. Of course, Twitter and Facebook are trying to fix this election.
Speaking of the election, a couple of tweets I posted over the weekend should tell you my thoughts;
About those polls that show Biden looks to be a slam-dunk…well, we prefer models that actually work…like the Helmut Norpoth model that’s predicted 24/26 presidential elections correctly.
Until next time, thanks again for reading…
Kip
Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/17 years.
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