HGSI Doc Top Down Review 12.20.2020

Previously published 12/20/2020 on the HGSI Community Forum. For earlier access to Dr. Scotts Top Down Review, please register at HGSI Community Forum.  

Greetings and Welcome to this Week’s Review

It was a great week in the markets as growth led.  We might have sold off some on Friday, but we saw a vertical move up off the lows the last 30 minutes.  After the close, the Fed announced it would ease some of the big banks’ buyback restrictions imposed after the 2007/2008 economic crisis.  A spike followed this in Futures led by the Big Banks

News flow continues to move the markets as we balance the emergence of available vaccines while the pandemic crisis has hit our nation’s hospitals, and multiple states are reimposing lockdowns.  Unlike March, we promise vaccines, which are currently offered to 1st responders and very high-risk individuals.  There is hope that we will see a stimulus bill passed this week. Since Congress is likely delaying their holiday trip home for this vote, there is every reason to believe they will give one soon.

The markets continue to go higher.  Yes, they are extended, but rather than relieving this extension with steep corrections, we see rolling corrections in various industry groups and styles as the market continues a fierce and rapid rotation.  We are in one of the strongest periods of the year from a seasonality approach, so the wind is clearly at the markets back.

Please join me on my Top Down Review.  For those that are new, I have nothing to sell you.  I am an unpaid volunteer and have been doing these videos for over a decade.  Like in medicine, I found that teaching a student made me learn more. Thus perhaps, I am the biggest gainer from these videos.  They have also forced me to follow a discipline that has allowed me to outperform the markets.