SHORT-LIVED PULLBACKS PROVIDE BUYING OPPORTUNITIES

July 15, 2020

The HCM-BuyLine® is clearly strong. The market had become overbought, especially the Nasdaq, and the pullback that happened on Monday was needed. There may be some further downside as the market tries to work off the overbought condition. Look for pullbacks to be short-lived, and investors should look to add to positions as opportunities present themselves. Growth stocks will probably see the biggest pullbacks, as they have been the real winners all year long. 

S&P500

Its looks like the S&P 500 could be setting up for a cup and handle pattern, which if it breaks out could see the S&P hit new highs this year.

Coronavirus Update:

Pfizer, BioNTech’s coronavirus vaccines get FDA’s ‘fast track’ status. The candidates, BNT162b1 and BNT162b2, are the most advanced of at least four vaccines being assessed by the companies in ongoing trials in the United States and Germany. The companies said they expect tobegin a large trial with up to 30,000 participants as soon as later this month if they receive regulatory approval. 

New York City reported zero deaths from coronavirus for the first time since the start of the pandemic, while Florida sees record numbers of new cases. We are not sure how long to keep everything closed when the death rate is dropping in New York. 

California Cases by County

California Governor, Gavin Newsom, announced a rollback of the re-opening, ordering the closure of bars and indoor dining for the entire state, and in counties on the "watchlist" gyms, salons, and churches were required to close. In fact, using county data from California Open Data, we can see the Southern counties are 72% of the incremental cases.  The Bay Area, which is 20% of the population has only 11% of the new cases.  This is a reason we think this dramatic measure could be an over-reaction.   

California Cases by County

Wealth Watch

Sign up for our weekly news to hear from CEO and portfolio manager, Vance Howard.