Wealthbuilder.ie Market Note 5th October 2020.

The American markets have reached an interesting juncture. Notwithstanding two Covid 19 stimulus packages
the jury is still out on whether we are still in a bull market following the March 2020 virus induced collapse.

To get an insight into real price action and understand true market dynamics I think it is helpful to return to our
old friend: "Dow Theory". From this perspective the trend is "in play". The Dow Transports have reached
previous highs but the Dow Industrials have not. For the bull market to be definitively back on course both
Dow indices must breach previous highs. In other words they must "confirm". They have not yet done so.

Given that most of the world's economy is in recession and that the American presidential election is next month
I find the strength of the Dow Indices, the NASDAQ and the S & P 500 surprising. I sense that until the election
results are decided there will be confusing volatility. However, if the Dow Trannies and the Dow Industrials
break to new highs it will mean the bulls have regained control and the trend should have "legs" and
momentum. If there is a negative break and March 2020 lows do not hold, we will have entered a new bear
market which will probably last approximately 18 months based on historical precedent or at least until a Covid
19 virus vaccine has been discovered.

Note: All Wealthbuilder.ie investment strategies remain on HOLD as prices are positively above their respective
200 Daily Moving Averages.

Study charts attached courtesy of StockCharts.Com

Chart: Dow Industrials: Daily.

Chart: Dow Industrials: Weekly.

Chart: Dow Transports: Daily.

Chart: Dow Transports: Weekly.

Chart: NASDAQ: Daily.

Chart: NASDAQ: Weekly.

Chart: S & P 500: Daily.

Chart: S & P 500: Weekly.

© Christopher M. Quigley 5th October 2020.

www.wealthbuilder.ie