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Posted October 12, 2020

Scott Stewart

By Scott Stewart

Never Been Better for the Recreation Sector

Welcome to todays Rude Awakening!

Once again, we are looking at a strong market open.

Lets get into the details, and find out which sector is heating up the most right now

Risk to the Upside

Despite the fact that we are NOT expecting a stimulus package to pass before the presidential election, markets keep pushing higher.

The S&P is up 43 points

The Dow and NASDAQ are both up about 225 points

Its the same trend we keep seeing each new trading day over the past couple weeks.

Risk right now is actually to the upside, rather than the downside.

The upside catalyst would be the passing of any stimulus package. Even though we do not anticipate that happening, the risk is still there that this event would shoot markets even higher.

We always want to look at pending news to see what might become a market driver.

This puts us in an interesting place

Pandemic Creating Demand

The 2008 Financial Crisis was about as bad as the 1929 Great Depression Prior to this pandemic it was the worst crash any of us has seen in our lifetime.

I was fortunate as a trader to have done very well during that 2008 collapse.

I remember taking my family to Disneyland. The park was packed, with families of 5 or 6 kids, everyone buying their $50 sweat shirts and $7 hot dogs.

Now, parks like this are suffering because people are so fearful of crowds.

But theres another sector thats benefitting from the same idea spending on recreational activities, doing so on a more individual level.

Boat dealers, dirt bike sellers, RV sellers their products are all on backorder!

People want to get out of the house and enjoy recreational activities in their own smaller groups.

Recreation Sector on Fire

This mentality gives us a trading opportunity in Harley-Davidson, Inc. (NYSE: HOG).

HOG is a trending stock.

After dropping to lows of about $15 when the pandemic first hit, its now up around the $30 level, with indicators showing its set to go higher, along with the rest of the market.

In our Pro level service, we set up a delta neutral trade on HOG.

This type of strategy menas we can profit whether HOG does go higher, or just stays at about the same levels, or even if it falls a bit.

This is done, of course, through options.

Thats it for today!

Well talk again tomorrow


Scott Stewart

Scott Stewart

Editor, Rude Awakening

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