“Profit-taking” in the stock market ahead of the election is just that, according to PrimeXBT analyst Kim Chua, who expects major stock indices to head for new all-time highs “post-election.”
The current chop across the market is merely “consolidation,” according to Chua, who warns the uncertainty heading into Q4 is designed to shake traders out of position ahead of a stimulus bill ultimately being passed that reinvigorates markets after the dust settles on the US election.
Read about this and more of Chua’s thoughts about the stock market below.
Expect New All-Time Highs Post-Election, The Time To Worry Is In Early 2021
Corporate earnings have surprised analysts and beaten expectations in the face of the pandemic, and with more stimulus coming, Chua thinks that “the market is consolidating ahead of the upcoming election.”
“Post-election, the stimulus bill will eventually be passed, and positive earnings will likely propel the stock market to new all-time highs again,” Chua continued. She fears the market’s response to a second-wave of COVID less than the rhetoric towards China as that directly affects US businesses.
When Stimulus Euphoria Wears, Stock Indices Will Struggle
She further explains that in Q3, economies were rebounding, and witnessing revenge-buying consumer behavior, combined with COVID relief aid, the stock market is safe for the time being. But in early 2021, when the “euphoria of the second stimulus package” has worn off, that’s when it is time to become worried about the stock market finally.
Chua says that in 2021, the stock market will “struggle to find reasons for going up.” But not before one more post-election push to new all-time highs.
In the first month of Q4, Dow Jones index trading pushed 2500 points lower than the October monthly high, kicking off the quarter on a negative note after a surprisingly positive Q3. Lingering effects from the first stimulus and the expectations of a second-round were enough to keep major stock indices thriving, until now.
Get Ready For Any Impending Stock Market Trickery With PrimeXBT
The lack of a second stimulus approval before the election has left market participants skeptical and have started to de-risk. Investor sentiment also has increasingly turned toward expecting a top in the stock market and another Black Thursday like collapse. However, the negative sentiment could work to the contrary and prompt a perfect environment for a short squeeze and push to all-time highs, as Chua suggests.
Whichever way markets turn, PrimeXBT has traders covered with CFDs on all major stock indices, including the Dow Jones, S&P 500, Nasdaq, FTSE, DAX, and several more. The award-winning trading platform also provides long and short positions on forex currencies, gold and oil trading, along with cryptocurrencies like Bitcoin, Ethereum, and more, all under one roof and available via a free mobile app for Android and iPhone.
The post PrimeXBT’s Kim Chua Claims Stocks Are “Consolidating” For “Post-Election All-Time Highs” appeared first on Vantage Point Trading.
No comments:
Post a Comment