August 18th, 2020
Chadd Mason, CEO The Cabana Group
Last week saw some profit taking in bonds, gold, and dividend payers. These assets have outperformed during the COVID-19 pandemic and the current retracement back to pre-COVID highs is a good place to reassess. The longer we can hold here without a pronounced sell off, the more likely we are for another leg up in stocks.
Make no mistake, there are many, many unknowns that investors seem to be discounting to the upside. Any number of things could occur that would result in a swift reality check and concurrent drop in prices. To me, it feels like we are in a holding pattern. Look for an end-of-week close above 3400 on the S&P and some leadership in financials for evidence that the next move up has begun. On the downside, we have room all the way down to 3200 before the current uptrend would be in jeopardy.
At Cabana, we remain in our Bullish/Transitional Bullish Scene.
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