10-06-2020: Bold Move... Market Tanks

Year-to-Date Strategy Stats as of today:

+ 37.18% : Turner Quant Advantage (TQA)

+ 13.05% : Tactical Growth (TG)

+ 1.84% : Diversified Income (DIS)

+ 16.41% : Leveraged Index (LI)

+ 4.22% : S&P 500


This afternoon, President Trump pulled the plug on the relief bill negotiations until after the election, stating that the democrats are not negotiating in good faith. Considering the fact that a relief bill is greatly needed by millions of small businesses and that equates to millions of voters may become disenfranchised, this is, indeed a bold move.


Is it a negotiating ploy? Could be. Trump wrote a book called, "The Art of the Deal"... so, maybe this is a gambit to get Pelosi back to the negotiating table for real. Personally, I have no idea, but I will tell you what I do know...


The market sold off hard on the news, but not enough to trigger any of our stops... yet.


I did make some adjustments in our stops and raised them to 0.25em below the current price and set them as trailing stops (1 em = 1 standard deviation of normal volatility). Looks to be a good move so far, many of our holdings have bumped up off the bottom.


Generally, I leave the professional guessing to the Jim Cramer's of the world, but I do have an opinion about today's market action... As I have said many times here and in my weekly Client Letter, there are only two drivers right now in this market: 1) The so-called stimulus bill (it's actually NOT a true stimulus bill... it is, in reality, another stop-gap keep-the-lights-on bill); and 2) The hope for a COVID-19 vaccine. The odds now look to favor both happening post election. If this is true, then there may not be enough juice in this market to keep it moving higher... but, markets have a propensity to want to climb 'walls-of-worry', so for the time being, I am happy to have extremely tight trailing stops in place and no more than 50% invested, even in my most aggressive models.


While we did lose a tiny amount today (far less than the overall market), I am not overly interested in putting any more capital to work with the election only a month away. Risk is simply too high. But, I am not ready to cut and run. We have some great holdings in the portfolios and they may still move higher. Several managed to stay up and up nicely for the day.

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