Tuesday - Risk On

US 10 and 30 year yield rose up to four month high. Oil rose 1% as hurricane hurts US. However US trade deficit rose to $67 billion, third highest level on record. The heads of federal reserve and European central bank will give a talk today (more stimulus). 

We have  seen a V-shape recovery in the big tech industry after the pandemic hit the market in Mar. Besides that, past fours years have been great for investors with so many consecutive record highs. Earlier I pointed out the fact that, the stock market ain't the economy with an emphasis on the prosperous look-ahead for the market, however, the bubble created by the packages that the Fed has been printing, specially since early 2019, will have to come and bite soon. Not to mention, permanent job losses, weekly lay-offs, small businesses being crushed and the seemingly inevitable shift of economic power to China, are all reasons why we should trade with an extra caution, at least till the election results are out. 

Without considering the sci-fi/drama news of Trump testing positive for Covid19, still Biden is considered a winner of the first debate/sh*t-show by most sources. Building up the idea of a Biden presidency and how that could be stock market positive is mainly because it's expected that his gang will end up printing more money (Fed stimulus) and there is hope for a reasonable negotiations with China under Biden.

Until the election, we'll have a volatile market with similar gains and losses as we have seen so far. Nothing is driven by economy or technicals; everything depends on China deal, election, Covid, stimulus and similar narratives. The problem is being on the right side of the wave, and since the gains are becoming tight and risk is going parabolic, I suggest pulling profits and stay safe until there are some quality ground to work off it. Don't forget, we are not here to gamble, we are in this for investment and there is no reason why you shouldn't pull profits, even with little gains.

By the way, how is FB influencing this presidential election? Beside the disruptions of black lives matters, brexit and etc.

Let me know what you think.

Keep smiling and stay charitable.