September 29, 2020, 12:57 pm EDT
High Volume Down, Low Volume Up
After a couple days of rebound, today is down about -150 points in DJIA. Nasdaq holds up better today about flat. Congress $2.2 stimulus proposal is the driving force on this rebound. In fact, Entire rally since March bottom to today is based on the US government’s effort, including White house, congress and Fed. It works out very well with 70-80 percent gains during pandemic. Notice stocks are down in heavy volume and up is low volume which means rebound is on weak side.
First wave is on biotech and pharmaceuticals to make testing kits, treatments, and vaccines. Second wave is on technology companies who receive benefits from stay-home order like ZM, AMZN, NVDA, AMD, FB, MSFT, GOOGL, etc. Last wave could be on industrial, financial and material because of infrastructure, defense, housing and investments.
However, it is important to note that the US presidential election is coming in about 5-6 weeks. Thus, all kinds of man-made good news could fade away and people will face reality again. Thus, one scenario could happen that longer delline will come to reflect the reality of fundamentals. Meantimes, reducing holding positions and pay attention to stock selections are essential.