The “Fear Gauge” (aka the VIX) is back up to its highest level since mid-June. All three major US indexes notched the second consecutive month of losses. Investors & traders are getting the pre-election jitters and beginning to put on protection.

Roughly 63% of investors ($1 million+ in assets) have tweaked their portfolio ahead of the election, according to UBS. Portfolio adjustments like increased cash holding, sector reallocation, or derivative protection.

The market anxiety is being burgeoned by a resurgence in COVID cases and stall in fiscal stimulus discussions. The US can’t afford another economic shutdown.

The market appears dislocated today as investors pull profits from 2020’s secular outperformers like tech and consumer discretionary, which can be seen with the Nasdaq 100’s (QQQ Quick QuoteQQQ - Free Report) lagging performance. Investors are putting their money back to work in underperforming ‘value’ plays like energy and industrials, being illustrated by the Dow Jones Industrial Average’s (DIA Quick QuoteDIA - Free Report) advancement today.

I expect volatility to remain with us through the end of the year, not to mention ripening buying opportunities.

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