My post-election strategy
Tuesday didn’t disappoint us, left us with a green day on heavier volume. Leaving the NYSE and Nasdaq with accumulation days. News was very quiet all day, with the mid term election taking center stage. The market really did not pause to await the outcome, which shows it is pricing in the gridlock. After hours news was positive for the most part, also leaving the market quiet. Wednesday the election outcome, crude inventories and CSCO earnings should perk the action up some.
Crude closed down for the day on expectations that Wednesday’s inventory will reflect another build. Down $1.09 to close at $58.93. Gold closed down by a hair (20 cents) to close at $627.70 an ounce. Which was just on hold all day basically to await the election results. The US dollar fell also awaiting results.
Wednesday will start the day off with post election positioning. As I stated last night if the republicans win the house and senate look for a short term rally, if the Democrats win both look for a short term pullback. If they split and leave us in the gridlock the market is expecting we’ll look for a normal reaction which could result in the correction and then continuation to the upside. Tuesday’s green day was nice for the bulls, but not as strong as we’ve seen in past bullish days. Shooting stars were left into resistance on every major index and most sectors of significance. That is a reversal candle if confirmation comes, so we’ll look for that. Also closing in the lower half of the range shows conviction waning, but after the rise over the last two days pulling back would technically be healthy. So assuming gridlock from the election we’ll look for early weakness into some support and for buyers to come in.
Some earnings for the week of November 6 — 10: Wednesday pre market — BRL, BCRX, CVC, DYN, FD, HGSI, RL, SIRI, WGL and after the bell — CELL, CSCO, ERES, NAPS, SNIC, UTSI. Thursday pre market — FS, HANS, JCP, KG, KOSP, TOMO, TOPT, TPTH, TXU, URBN, and after the bell — AIG, BRKS, ECLG, DIET, ENER, EXPE, KSS, SNDA, DIS, WFII. Friday pre market — IAG.
Economic Data for the week of November 6—11:
Wednesday 10:30 Crude Inventories, Thursday 08:30 Export Prices ex-ag., 08:30 Import Prices ex-oil, 08:30 Trade Balance, 10:00 Wholesale Inventories, Friday no data due out.
ES (S&P 500 e-mini) Wednesday’s pivot is 1388.50, weekly pivot is 1373.75. Tuesday closed green but well off the highs we saw mid morning. Volume was good and the range was not as tight as was expected. 1388.50 is not only the pivot but it is a key fib, so this will be the spot to watch Wednesday. Trading over it watch for the bulls, under watch for the bears. Indicators are favoring some pullback after the last two days gains, but the election could trigger some volatility before we see that happen. Intra day Support: 1388.50, 1382.50, 1379.25. Resistance: 1390.50, 1395.25, 1398.50.
NDX (Nasdaq 100) closed +9.27 at 1741.53. Support: 1730.12, 1723.07, 1710.70, 1705.98 and 1693.19. Resistance: 1745.79, 1750.21, 1761.46 (Jan 2006 highs).
Good trading to everyone.
Teresa Appleton has traded equities and options for
nine years and futures for seven. She is founder and CEO of TradeLogic, LLC. For
more information about Teresa and the training she offers stock, options and
futures traders,
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