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Expect Volatility Due To COVID and Election, My 2 Cents by Mike Simonato

Guest Blogger

Written by:  Mike Simonato, Ontario Presenter: “My Three Friends”, Dec. 3, 2016, VectorVest International Online User Group (Click here to View: My Three Friends)

First and foremost I hope everyone enjoys a relaxing Thanksgiving Weekend even though it may not be the same for a lot of us. Now on to business.

Trading the Street:  Here is what I have learned from talking to various people a lot smarter than me (I know that’s most people).

  1. A Wall Street contact is really highlighting the need to own Silver for the long term. She said she believes the Price of silver will go up and it will go down, but make sure I’m in the space.  She said you can do much better getting out when the chart tells you and buy back in when the chart tells you, and indeed that is by far the smartest way to do things.
  2. With the US election coming, expect market volatility and perhaps a correction at some point.
  3. I talked to a TD Exec today and he highlighted that it will likely be at least 2022 before anyone goes back to an office.
  4. A large number of Snowbirds are selling their USA Properties and if they go back it will be shorter duration rental ie up to 1 month.
  5. Due to the soaring COVID numbers, a number of restrictions have been reimposed. ie No eating in at restaurants. No theatres, gyms, casinos and many tourist attractions etc in Toronto, Mississauga and Ottawa.  Thanksgiving is only supposed to be for those living under the roof. No large gatherings.
  6. Amazing the number of people ignoring the restrictions/ guidance, and so in your face about it.
  7. Everyone I talk to is noticing a rise in rudeness and short tempers. Everyone I talk to in businesses has been said they get cussed out every day, there are fights/ arguments on a daily basis. I know firsthand that it is starting to take a toll on workers’ health.
  8. There is likely going to be a K shaped recovery.  What that means is some will do extremely well ie trades, builders, online shopping firms like Amazon and Shopify etc, while others will be hurt badly ie Restaurants, Hotels, Bars, Theatres (Broadway is closed until at least the end of next May), Casinos etc.
  9. The recovery may take years if not decades. Here is one major problem.  Everyone who bought tickets to concerts, for trips etc can’t get refunds even though they had insurance. They can only get Credit for future use. Two problems with giving credit and not refunds. While I understand their reasoning, if we give everyone refunds we’re out of business, however, by not giving refunds you have a lot of upset customers who likely will never use your service ever again. But also, say you get back up and running in 2021 and everyone with credit uses it. Then you have a lot of operational expenses with NO Income coming in.
  10. The last of the top 10 from the street. Both the US and CDN Govt’s are deep in debt and about to go a lot deeper in debt. Result: Both the USA and Canada are looking at going with Negative Interest Rates which will make GIC’s etc worthless, but they may have to do it to manage their enormous debt load.  This has the potential to be a decades-long event.

Anyway, enough ranting. Now for the Markets.

USA  C/ UP on Thursday

DOW JONES:             Broke above a Mini Head and shoulders.  RT above 1 on Thursday and Stochastics at an over bought level but could stay here for a while

NASDAQ:                   Pulled back to the 79 SMA then crossed the 20 & 40 SMA’s, pulled back to retest the 40 SMA  and now off to the races. Nice Candle Fri

S&P 500:                     Exact same as NASDAQ

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MKT TIMING:             Close to a new high, everything moving up nicely, RT above 1 this week as well

READ VIEWS (Very Good) and Climate  % Bullish advisors fell and Earnings Indicator still at same level the last few weeks

CANADA:  Also C/UP Thursday  More unusual for such a short C/DN in Canada

PTSE:                         Held the 200 SMA then crossed above the 79 SMA, Retested and now rising nicely.  Resist @ 16,722.75

VENTURE:                 Still in a channel. Good day Friday.  3 EMA above 8 EMA crossed above the 20 SMA  Usually a good buy signal

MKT TIMING:             Rising Nicely. Resistance right overhead. MTI, BSR and RT Rising

READ VIEWS  (Another Stan Masterpiece)  I have a lot of homework to catch up on this winter

 

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