Posted October 02, 2020
By Scott Stewart
A Pebble Can Initiate an Avalanche...
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Good morning folks, and welcome to the Rude Awakening!Friday is a great time to do a review of everything weve seen throughout this trading week.Lets start with last nights big newsTrump Tweets: @FLOTUS and I tested positive for COVID-19.
At 1:40 AM ET, Trump shared this tweet. And within 20 minutes the futures went into a landslide selloff.I myself started buying into some puts on the news!But the futures did try to recover a bit, rather quickly, within just a few hours, and theyve been climbing more from the initial low point of last night.This morning, however, theyre falling again.I would definitely anticipate a weak day todayLooking at the Big Picture
After fighting so hard this week to push up above it, we are now once again below the 50day MA.Our stochastics and RSI are also giving us sell signals now.Theres a saying from Sun Tzu, the Chinese military strategist and philosopher. It goes -- and I'm paraphrasing -- a pebble can initiate can initiate an avalanche, but it is not responsible for it.This idea applies to us today because, if the market is ready to collapse or see a major fall, one small catalyst is all it takes to put that event into action.But, if the market is strong, one small event, like Trumps situation, is not going to cause major, big picture effects.So, to figure out whether or not this pebble WILL cause an avalanche, lets look at our recent historyWhatever Happens Today, Dont Panic Yet
The key is this: its not long ago we were at all-time highs. It was in the early days of September.We have non-farm payroll numbers coming out today, and they look good.Unemployment is down.The economy is recovering.We are in what appears to be a V-shaped recovery in the markets.All this to say, signs indicate the economy is continuing to recover and hold that recovery, month after month.I do not know whether or not Trumps contraction of Covid-19 is enough to tumble us all the way back down the hill.I do believe well have some ugly days, but well again see strength coming back into the marketplace.It will definitely be interesting to see how today goes.But, whether we bounce back or continue to fall, its all the same for us traders. Either way, it presents us some amazing opportunitiesWe have had an AWESOME trading week, though, despite volatility and all the uncertainty.So far, in total, we have seen 10 winners in this beta test, out of 11 trade ideas. Were clocking a win rate of 91%! And thats just in 3 weeksThe Rude Awakening Pro beta test is off to a phenomenal start.If youd like to join this service for free, and for life, just click here to sign up. There arent many spots left.That's it for this week.Well talk again Monday.Regards,Scott StewartEditor, Rude Awakening
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