1) Evening #Markets Report: Primary Trend Still In Caution Zone. However, Strong Institutional Sell On Heavy Volume Adds Distribution Day To Count, Now At 5 For S&P, 3 For Nasdaq. VIX Shoots Higher...Danger Zone. All Indexes Lower For Month Of October. Biden Win Predicted?

2) Let's get down to brass tacks. Today was a really nasty day. I spent most of it first dealing with the fact that my internet was down while looking at the morning futures way under water. That being said, I handled it and got on with the day. We have a tough situation here.

3) First off, the S&P, Dow and Nasdaq all fell below their 50dma. We really hung on for a while but in the end, we fell. Today was decisive in that area. Personally, I started shifting a lot more of my holdings into cash. I am approx 51% there and the rest are in stronger stocks.

4) 2 of these are solidly in profit & the rest are either break even or underwater. 1, TSW, I simply cut back & sold half. I can say that the last couple of days did hurt me personally, but that's life as a trader. I'll make it back soon. But let's take a look at other indicators

5) One final note first, I did say, start to cut back. I'm taking my own advice of course and hopefully you did too. See prior posts about this.

VIX: Closed at 40.28 today. I said earlier that we had strong resistance @ 32.00. We have broken that. Next R is 43-44.

6) We are either at the beginning of a Big Sell Off, or We Have Exhausted The Downtrend. Honestly, it could go either way. If we hit 50.00, we are once again in Armageddon Territory.

Dollar: This is looking bullish again, a big turn. If the $ is moving up, stocks will move down.

7) It means people are looking for safety, so they're selling stocks, commodities etc & moving to cash.

Treasuries: They're moving up & have been for a while. This also means people are moving to cash.

S&P: Already stated that we are below the 50dma. We need to stay above 3220.

8) A break below 3220 will spell trouble, further downside. But it MUST stay below this for 4-5 days.

Ok, so what is the good news? If we fail to break below 3220, we have just set ourselves up for one hell of a rocket ride going into the Best 6 months Of The Year.

9) But what if we go below 3220 for a while? Chances are we go a lot lower. More importantly it means that the trigger for the Best 6 Months will be delayed. That trigger is currently resetting. It is an adjusted MACD indicator. It is negative right now.

10) The key to the "Best 6" is that indicator. Sometimes it triggers early like in October (highly unlikely this year). Mostly it triggers in Nov., sometimes late Nov. & on rare occasions it gives a go signal in December or January. So what do we do now? We wait for that trigger

11) The more and more I look at that, the more I realize it may be the one thing we really have to pay attention to. Patience is key here. There are so many things up in the air right now that the market is having an extreme anxiety attack. It will get back to normal eventually.

12) The other seasonal I've been talking about is the 85% chance of a rise in the markets from Oct. 27th to Nov 4th,. This is still in play. However, I have to admit it sure looks like the 15% chance of it failing is coming through this time around. So why did the #markets fall?

13) Normally, I don't hypothesize on reasons. I just look at charts. I think Covid is part of the reason because we are now going into flu season and more and more bad news about cases are prevalent. I also think lack of a stimulus bill is an issue, but eventually we will get one

14) But what I really think is the catalyst is that we finally heard presidential candidate Joe Biden say that he was going to raise taxes, AND that the polls are saying he is going to be elected. Let's tackle these one at a time. For the record I am a Conservative Democrat.

15) A Conservative Democrat is a person who has a heart and wants good social programs, BUT he also wants to make sure they make sense financially. So I fall into the category of a Kennedy Democrat. I am for the workers and business (big and small), but I'm not Santa Claus.

16) Now statistically, when an incumbent president loses after his first term, the market reacts negatively. The reason for this is because there's usually a policy change. If the incumbent is re-elected, we know what we've got. If we get a new president, the markets aren't sure.

17) Polls are showing a Biden win, once again statistically, the #markets will now head down and it will take about 4-6 months for them to adjust to new policies. That means they head down during those months. That's the math and historical record.

18) Doesn't matter who's coming in or out of the White House. Has nothing to do with Joe when it comes to this. But, there's one thing that could be adding to it. Joe Biden wants to raise taxes on corporations. & I find it curious that this downturn began when he made that clear.

19) It's not a matter of taxing those over 400k in income. It's that he wants to raise taxes on businesses. Expect that this will also include a change to capital gains tax, amongst others, so even the trader and investor will get hurt, even the middle class.

20) But the big thing is corporate taxes. More taxes on corporations? Less profits. Less profits, then a lower share price. Lot's of lower share prices because the tax hits all corps on the stock exchanges? Then Lower Indexes. And that's why you'll see a downturn for 4, 5, 6 mo's

21) It then comes down to the corp's readjusting their internal tax policies to compensate. It'll take time for that to happen, thus 4-6 mo's. Now on the other side, you'll see a BIGGER stimulus if there's a blue wave, adding inflation. Inflation means a higher market eventually.

22) But that is not what we are facing right now. Stimulus, infrastructure spending etc., will take time...4, 5, 6, months..... 2 1/2 months of which is from election day to inauguration. The market will react. Now if Trump wins again? None of that matters. Business as usual.

23) But the market is already pricing in a Biden win. Remember when I said that if October was lower by the end of the month then it's predicting a Biden presidency? That's happening too, right now. It's a statistic coupled with a tax consequence. Add in Covid lockdowns?

24) Feels like a long wait until the MACD triggers the "Best 6" doesn't it? One day at a time. Futures are up slightly after the close. Expect one Hail Mary from Trump. Might already be in progress with Hunter Biden. Might not be true but it's all voter perception at this point.

25) Peace and Love. See you in the morning. Hoping for a bounce but clearly we are cautious. Hated to sound like a downer, but it's how I see it. Maybe I'm wrong and we rally from here. 85% chance right?