Technical Analysis:

  • Massive rally yesterday across the market landscape on the news that FBI didn’t consider Hillary Clinton a criminal. 
  • Essentially one day to the upside erased 6 of the 9 down days the market had recently experienced on the S&P 500 (SPX).
  • However, this is a meaningless rally in the grand scheme of things, because if Trump wins tonight there will be a significant sell-off because he is not Wall Street’s candidate of choice. 
  • Careful with how heavily long/short you get ahead of the election. More cash is ideal. The profit potential is to the downside while the upside is somewhat limited following yesterday’s rally. Should Trump win, you could see a Brexit-sized sell-off. 
  • Volume on SPDRs S&P 500 (SPY) was slightly higher than the previous day’s total and well above recent averages. 
  • Bounce occurred right off of the 200-day moving average yesterday after having perfectly tested and held it on Friday. 
  • CBOE Market Volatility Index (VIX) melted away yesterday, dropping 16.9% down to 18.7. 
  • Barring a tie tonight or a contested election, I expect that the market will begin trading in a more trending manner. 
  • United States Oil Fund (USO) bounced yesterday but technical damage is already taking hold with the uptrend that started back during the February lows having broken. 

My Trades:

  • Did not add any new positions yesterday. 
  • Will look to position myself short today. 
  • Closed ADBE yesterday at $108.34 for a 2.3% loss. 
  • Will look to add 1-2 new swing-trades to the portfolio today. 
  • Currently 100% Cash

Chart for SPX:

SP 500 Market Analysis 11 7 16

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