MaR Sep 04 2020

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Market Report for Sep 04 2020

SPX Pullback

Trade Zones:

Market Trend:

Market YTD:
Nasdaq Composite +27.7% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average -0.9% YTD
Russell 2000 -7.4% YTD

Market Volume:
NYSE Vol: 993.3 mln
Nasdaq Vol: 4.4 bln

New Positions:

Portfolio % of Return:
Stocks: +422.98
FX & Comms: +4.85

A deep sell-off yesterday with high volume. In the last 3 sessions, Nasdaq had 3.5 bln, 3.9 bln and now 4.4 bln volume. And with VIX up to 33.60, we have to assume the selling is not ‘normal’ and has a degree of panic associated with it. The timing is not unusual as it is NFP and a long weekend in addition to a big move which will often need to take a breather.

S&P 500 is about 3.5% from its ATH and Nasdaq Composite about 5% from its ATH. Dow lost almost 3% which was around 800 points but JPM the largest bank in the world and 7th largest cap company in the Dow only declined 1.04% and sits just above 100. So could this be the start of a rotation or is it a sell-off?

Right now it is too early to say but a pullback was to be expected. We have actually been awaiting this since the dumb money joined into this bull market which we referred to a few times in the more recent weekly webinars. Since June 15 2020, the S&P 500 has moved up 20% so a pullback between 30%-50% would be acceptable as a breather level and up to 20 days in duration.

Generally, September is not the best of months but this has been a very different year to most years.

We await NFP and see how the market reacts to that. Based on yesterdays price action, there is a good chance that even if NFP is good, there maybe further selling today. We will look to add and axe positions during the coming days to stay current with the market.

SPX seasonality

Nasdaq seasonality

PORT Sep 04 2020

Lets go trade!