Pre-Election Euphoria

After 9 consecutive sessions of losses the market is set to turn things around in a big way.  S&P500 futures are up over 1.4% this morning, fueled by the FBI clearing Hillary Clinton, yet again of any wrong doing in their freshly re-opened investigation.  Curiously enough price action has  come back to those case re-opening lows this morning before pulling back.

With the FBI clearing Clinton, the market is back to pricing in her election as the next President of the United States.  We've covered this previously, but Trump just months ago has called this market a 'bubble', while Clinton has only talked negatively about the high price of prescription  drugs.

What Does the Election Mean for the Stock Market?


The VIX is under 20 and down over 13% this morning and coming down to greet that odd jobs number fat finger from Friday.


After 9 straight days of lower prices:

the market was due for a bounce right?

So what does this mean for the market going forward?  Historically the market rallied into election day.   Despite today's sharp reversal, we aren't seeing that this time around.  I think the recent sell off, coupled with the greater odds the market will see more of the same under a Clinton regime, provides the fuel for a nice rally for the markets into years end.

The $SPY has reached a point where previous sharp reversals have occurred in the past.

I think there is a good chance $SPY moves back to the top of the channel putting prices up near $217 level.  Before that can happen, election day needs to be put in the rear view mirror.

Today's 1.4% move to the upside to start the week, is a statement about the market getting some certainty back.  The FBI investigation into Clinton added a tremendous amount of uncertainty so close to election day.  Confirmation of this will be a market that holds these pre-market gains or perhaps even adds to them as the session progresses.

Today's trading action will likely set the tone, for not just this week, but for the rest of the year.   If the market does not hold onto these gains, or even worse somehow closes down for a 10th consecutive session, the price action will be saying that the election wasn't the main reason the market has been in a tailspin the last two weeks...    And that could spell significant downside in the months ahead.

Stay tuned for more updates and see you in the chat room at



Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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