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Investors are hesitating a day after pushing major indexes to record highs on biotech Moderna’s optimistic COVID-19 vaccine news. We saw a similar move last week after drugmaker Pfizer and partner BioNTech’s own vaccine cheer.

While markets may have priced in a lot of that optimism, the rest of the year probably won’t see big market drops, says Thomas H. Kee Jr., president and chief executive of Stock Traders Daily and portfolio manager at Equity Logic.

But that’s coming in 2021, he tells MarketWatch, in our call of the day.

The big reason is that Kee believes analysts’ 2021 earnings per share expectations for the Dow Jones Industrial Average are too high. Those DJIA EPS growth forecasts are hovering at 26%, down from 32% recently due to lockdowns kicking in over an autumn COVID-19 wave. As those expectations come down, as he expects they will, valuation risk goes up, he says.

As for how to play this coming drop in stocks, Kee is sticking to a strategy he recommended to this column in May — rotating between the S&P 500 ETF   and cash. Keep that going, he says, until you see signs that investors are picking up on an overvalued market.

The action in the stock market will matter most, he says. “I’m watching for reversal signals and they come in all kinds of different shapes and sizes,” he says. One possible signal: markets break above a big level of resistance and then reverse back down. It’s one of many, Kee says.

The markets

Dow and S&P 500 futures are down, while Nasdaq futures are creeping up. European stocks are lower. The Nikkei briefly hit a 29-year high, while China stocks slipped. The pound is up on a report of a possible European Union/U.K. trade deal next week.

Read: This is how bad commercial real-estate pain could get for banks and other lenders

The buzz

Tesla stock is up 12% in premarket on news the electric-car maker will join the S&P 500 next month. And global online-rental marketplace Airbnb announced a $1 billion initial public offering.

E-commerce retailer Amazon has launched an online pharmacy store, which includes discounts for Prime members.

Home-improvement group Home Depot reported better-than-expected earnings and revenue. Shares of Walmart  are up after the retailer topped earnings forcasts. Earnings from Kohl’s  are still to come.

Retail sales and import prices, followed by industrial production, business inventories and a home builders index are ahead. Federal Reserve Vice Chair Richard Clarida said late on Monday that the economy would likely need further monetary and fiscal support.

Georgia’s Secretary of State tells the Washington Post that top Republicans, including Sen. Lindsey Graham, have been pressuring him to toss out legal absentee presidential ballots. Meanwhile, the state’s vote recount has so far uncovered 2,600 uncounted ballots that were mostly for President Donald Trump.

Hurricane Iota unleashed on Central America just days after Eta.

The chief executive of Take-Two Interactive talks next-generation videogaming and more at Barron’s Investing in Tech on Thursday at 1 p.m. Register here.

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