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Positioning Into the Presidential Election


See both sides before you make a bet.


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

This morning I wrote in real-time on our Buzz & Banter that "My first blush inclination was to fade (read: sell) the opening bell, but I don't have the brass tacks to do that given the current risk reward."

There's 22 years of learned wisdom in that statement; sometimes the ability not to trade is as valuable as trading ability. The 2:1 positive breadth and the traction in the financials kept me in check and at the end of the day, discipline must always trump conviction.

Will this market hold or will this fold?

Good question; let's take a look.

The Hold Camp
  • The Banks (INDEXDJX:BKX), Trannies (INDEXDJX:DJT), Semis (INDEXNASDAQ:SOX) and Metals (INDEXNASDAQ:XAU) are all outperforming the broader market (by about 70 bips each).
  • Breadth has been sticky green all session (and tapes that are strong all day with 2:1 internals tend to end that way).
  • The NDX (INDEXNASDAQ:NDX) held the 200-day and is trading above that all-important level (NDX 2661)
The Fold Camp
  • Apple (NASDAQ:AAPL) -- which has been a great leading indicator -- is back below the 200-day.
  • The specter of uncertainty looms large -- and uncertainty is bad for the tape (or at least it used to be).
  • The S&P (INDEXSP:.INX) continues to churn and is facing resistance in the S&P 1430-1435 range, per the chart below.

Where Do I Net Out?

My sense -- and it's just a sense -- is that odds favor a downdraft tomorrow.

How much conviction do I have? Enough to share (all a man has is his name and his word) but not enough to slap bank on the table.

With a Nor'easter on the way and a powerless house in the burbs, my focus needs to be on my family and my business -- in that order -- with my P&L a distant third.

Good luck, and may peace be with you!


Twitter: @todd_harrison

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