Daily Commentary: November 05, 2024

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Trading the Election Outcome

Posted by Pete Stolcers on November 05
www.oneoption.com

What do we know about previous election reactions?

PRE-OPEN MARKET COMMENTS ELECTION DAY – If we take a look at the last six elections, there has been an upward bias the day after. The market has been trending higher and we are in a period of seasonal strength. Earnings releases have been good, but the reaction has been muted. I believe the market will move higher regardless of who is elected. There will be less uncertainty and we should see a relief rally. Investors know what to expect since we’ve seen four years of each candidate.

That said, we needed some cushion for our starter swing trades heading into election night and we didn’t get it. We wanted the market to be at the all-time high last Friday and instead the market pulled back slightly. This is a good time to watch from the sidelines… that’s what Asset Managers are doing as well. The market is right where it was three months ago.

Regardless of who wins, the debt ceiling will be reestablished on January 1, 2025 and it will have to be raised. If you thought the mud slinging would end today… guess again.

The FOMC Statement is Thursday. Job growth is slowing and we will see how concerned they are about it. Hourly wages increased .4% last month and that was a bit high. The PCE core was also a touch higher than their target.

Let’s see how all of this plays out. If the market breaks out above the all-time high or it drops below the 100-day MA, we’ll be ready to trade. The best thing you can do is to set upside alerts on strong stocks and downside alerts on weak stocks.

It will be two months before the new President takes office and month’s for their policies to take effect.

Support is at the 50-day MA and resistance is at the all-time high.

If you don’t vote, you lose your right to bitch. Go vote, but bitch somewhere else.

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