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Market Lab Report - Premarket Pulse 11/8/16

The majors bounced yesterday though on lower volume. The S&P 500 which touched down almost on its 200-day moving average gapped higher at yesterday's open on news over the weekend of Comey's decision to not press charges against Hillary Clinton.

The mainstream perception is that a Clinton win will be more predictable for the markets since Clinton represents the status quo while Trump is more of a wildcard. A Clinton victory suggests the market could gap higher while a Trump victory could gap the market lower.

That said, some have pointed out that Trump's policies appear to be more business thus stock market friendly. It was believed by the mainstream press that Brexit would be bad for the UK economy, thus UK markets gapped lower for two days, but then quickly shot higher as market forces put their capital to a vote. Nevertheless, the global economy which obviously includes the UK remains in a quagmire so the long term trend since 2014 for most global stock markets remains down.

Election results are released before tomorrow's open,

Three possibilities await:

1) One candidate is the clear winner, winning both the electoral and popular vote. While the market generally has reacted in a somewhat muted manner towards results the day after elections, at least with respect to any significant gaps in price, the market seems to imply there is more at stake this time with respect to which candidate wins,

2) Clinton wins the electoral vote but Trump wins the popular vote creating a potential replay of the Bush-Gore standoff in the year 2000 election resulting in much viewed documentaries such as "Recount".

3) Neither candidate garners the required 270 electoral votes in which case, the election is decided by the House of Representatives. Currently there are more Republicans than Democrats in the House suggesting a Trump victory.

Whatever the outcome, one may wish to reduce their exposure before today's close as a number of unknown variables could cause the market to gap at tomorrow's open, much as the Brexit surprise caused markets to gap lower. Market action since July has been challenging at best, thus having at least some of one's trading capital on the sidelines may not be a bad strategy at the current time.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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