Year-to-Date Strategy Stats as of today:
+ 36.54% : Turner Quant Advantage (TQA)
+ 12.68% : Tactical Growth (TG)
+ 1.86% : Diversified Income (DIS)
+ 17.11% : Leveraged Index (LI)
+ 4.69% : S&P 500
Today starts, quite possibly, one of the more tumultuous 4th quarters in stock market history. Hard to imagine a more diverse set of economic conditions coming together at the same time than what we have in front of us right now, including: a presidential election that will have more to do with the direction of our country (free-market capitalism versus socialism and loss of economic freedoms); a presidential outcome that could be totally uncertain for weeks, if not months; an economic relief bill that could have a significant impact on economic stability and a big boost to the stock market... or the triggering of a significant sell-off in the market if is not signed into law; the release of a COVID-19 vaccine that could be the first step in getting us truly on the path to full recovery.
If the left wins the presidency and/or takes over the senate, they are promising massive changes to how the country is run. Some love this idea; some do not. But, regardless of the outcome, the market is sure to react and react significantly. My guess is, if the right wins, the market moves higher since the incumbent party is pro-stock market and the left is not.
If Trump and Pelosi agree to a relief package, it will likely boost the market a lot higher. I suspect Trump wants it out before the election and Pelosi wants it out after the election, regardless of the economic pain that so many Americans are facing right now. The market, today, is optimistic that a deal will be reached pre-election. That is one reason why we are back (a bit) in the market on the bull side.
There are potentially significant trends likely between now and the end of the year. October can be a very dicey month. I am ready to move us back to cash at the first hint of a bullish trend reversal.
And, as I have said for weeks, my plan is to be 100% cash before the election, one way or the other. Even if today's bullish trend continues up until the election, I will still move my clients to cash before November 3.
One key to successful trading this quarter is to stay nimble. That's my plan.
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