The big catalysts that move the stock market remain the same:
There’s a second COVID wave under way and many of the so-called social distancing stocks continue to ramp up, especially software;
A second COVID wave means more stimulus. More stimulus is positive for stocks in general but more so for small caps. Russell 2000 went up 10% in the past two weeks;
The pre-election period tends to be volatile as it often brings a large number of surprising turns. Clean energy stocks have accelerated their upside ascent in expectations of the changes that a new administration might bring. Cannabis-related stocks might be the next ones to rally.
The next week is also the start of a new earnings season. Financials are the first ones to report followed by tech a couple weeks later. I would not be surprised to see pre-earnings rallies in strong stocks (mostly in tech) as many speculators try to front-run earnings reports.
Here are just a few of the ideas and comments I shared with subscribers last week: