The Election Trade

From all indications it looks like Hillary Clinton will win the election tomorrow. What is really interesting is whether the Democrats will also take the Senate. Right now it looks that way. If that happens it would be a strong mandate for Hillary. The House seems like will still remain Republican. So, the overall givernment will be split. However, having the Senate behind her may make stronger and the expectations from her first 2 years could be higher than normal.

The general concensus is that there will be a bounce in the aftermath of a Clinton victory. In fact, the pre-market numbers look like there will be a very strong bounce of the lows we have seen.

From the trends perspective, SPY is still very bearish. IWM could be looking to bounce. EEM looks bad. The Technology sector (XLK and QQQ) both look bad. The XLF is neutral. The XLE is broken as well.

XLV and XBI both look broken and will likely have a negative impact even if Hillary wins. I am long puts on both of them.

I am positioned bearishly in the market but will look to trim if I see the trends turning for real.