Backroom Deal Mystique

The current market cycle we have been in since the late-March lows continues to be as forgiving to bulls and blind dip-buyers as virtually any stretch I can recall in modern Wall Street history.

Not only are we seeing equities broadly snap back off President Trump's selloff-spawning tweet yesterday about a Stimulus Deal being on the shelf until after the election, but names like FSLY NFLX and a bunch of solars are absolutely screaming to the upside. To expect the airlines to bounce on renewed hope for either Executive Branch action to issue Stimulus Checks to Americans is perfectly reasonable, and indeed AAL DAL UAL are all green, but the manner in which this market has immediately shrugged off bearish concerns remains unique. 

As for fresh ideas and strategies, we continue to have our levels in mind which helps gives Members context during this mess: On the top Nasdaq ETF, QQQ, the $280 resistance zone has yet to be breached, backroom deal hopes or not. 

It is also worth tracking what happens to the large banks here very closely. With a new earnings season approaching next week, the big banking houses in the XLF ETF, below on its daily chart, are set to report early on as usual. Bumping up against that declining 200-day moving average (yellow line, arrows) represents a well-defined battleground area from which the result could easily dictate where banks head into 2021. Note how the 200-day provided stiff resistance on each test since the March plunge, beginning in June.