Some quick thoughts on the market:
Last week, we began to see the start of the tech heavy Nasdaq break down. This trends looks to continue this week:
In the past, the semiconductor sector has been an early indicator for the direction of the market. If this holds true today, then the US equity market may be in for a few more bumpy weeks (or months). The Proshares Ultrashort Semiconductor ETF (“SSG”) has been trading upward since mid September and is about to break to its highest level in June. This ETF tracks the inverse movement of the semiconductor sector and can be a useful tool in verifying breakdowns in specific indices:
However, the broader market has not yet followed the tech sector down. Both the S&P 500 and the Dow are trading at their respective 50 day moving average. If both indices start trading below this average, I think we will see portfolio managers start moving to the sidelines until after the election.