HGSI Doc Top Down Review 10.3.2021

Previously published on the HGSI Community Forum. For earlier access to Dr. Scotts Top Down Review, please register at HGSI Community Forum.

Welcome to this Week’s Review

The markets peaked in early September and threatened to roll over (SPY, QQQ, DIA), while the RUT has continued its sideways consolidation since February.  The last few weeks have seen a rollover in the major indices as the Fed has discussed reducing QE and ultimately raising interest rates.  The major indices have dropped below their regression channels and below their major moving averages.  Considering we are entering October, there is legitimate cause to worry that we may see more selling, at least for the next couple of weeks.

Then came Friday.  Merck released data on its COVID-19 pill, which, after being diagnosed with COVID-19 reduces hospitalization, ICU visits, and death.  Reminiscent of Nov 2020 with the news of the Covid 19 Vaccines, we saw a rally Friday after this news came out.  For the bulls, this may be the news they need to see the market break out to new highs with rotation into those names that lagged during COVID, including airlines, entertainment, hotels, cruise ships, and casinos.  We saw this start on Monday, which turned out to feel like a massive bull trap as the markets sold off till Friday’s rally when the bull trap resolved higher on the news.

What will happen Monday?  Join me as I look at the Bull and Bear case and prepare for the coming market week.

Remember, this is education only.  My goal is to help you BECOME YOUR OWN GURU.