US stock market faces new challenges....

 Stock market has faced many challenges and was trying to digest and discount all challenges.

Beside election, 2nd wave of COVID-19, now we have another immediate challenge which market faced on Friday.

New challenge is health of US President Donald Trump, reaction to that challenge was sharp but was managed by close.

Friday saw a shift in market where technology took a severe pullback.

Friday also saw rotation into laggard travel related stocks

S&P 500 & Nasdaq is below 50 DMA does not give a healthy technical picture.

Monday could be challenging for US market depending on health update of US President

Question remains how to navigate a very difficult and challenging market going forward

Earnings will take center stage starting from week of 12th November

Earnings should be good for most technology and stay home stocks

Travel related stocks will continue to burn cash and will show substantial losses

Real question is, how much of good or bad earnings are already baked in

It is never easy to make money or predict direction of market in short term

My recommendation is to underweight stay home stocks as they may have overshot already

Contrary play like travel related stocks should be overweight as they may have been pushed down too much

October is a challenging month most of the time

Stay close to news flash and react accordingly

Good luck with your own analysis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed