Stocks Explode, Nasdaq HaltedThe Nasdaq was halted overnight as the index surged up to 4% higher off the back of a stronger than expected performance by the Trump Camp. Apparently, the odds of a "Blue Wave" have all but collapsed, and this bodes well for Mega-Tech and growth stocks. Uncertainty around a contested election was also abated, off the back of a relatively orderly night of voting, which put clear pressure on hedges such as the Vix, which is down as much as 13% this morning. I think it goes without saying, that nothing material has changed since yesterday night when the voting numbers began to roll in, other than the price. Then off the price action, we get narratives to validate the move. This is not how it's supposed to work. Millions of votes are yet to be counted, and they're Biden weighted, so this election is still very much up in the air, and likely going to be contested imo. But, perception is everything, and when the price moves, it changes our perception of risk.
Technical trading is becoming increasingly difficult in a market that moves wildly off of immaterial headlines, and pure assumptions. We lost fundamentals a long time ago, but until recently, technicals held up well as an indicator of future price action. We will continue to use technical analysis (and fundamental analysis), among others, to assess the state of the market, and future price action. But, it's like drinking warm beer. I'll still drink it, but something's definitely off.
SPY Analysis:
SPY is poised to gap up to around 341 on the open amid the nuclear bullish sentiment we're witnessing across the globe. This level is key as it's right around the upper band of the descending channel. A break above this level would put us above all major short-term resistance levels, and could result in another squeeze to the 350 level, and the long-term Green line resistance we broke below on Oct 19th. If we get rejected at the top of the descending channel, we could revisit the lower band as early as this afternoon. Vix is looking very oversold right now. I can only speak for myself, but I'm still net short, and hedged for the worst case scenario. As far as I'm concerned, nothing material has changed, not even the losses in my portfolio over the past 3 days are material. I'll share these trades with you guys the moment I unwind them, and it might be as early as today, depending on whether or not something material actually changes. Let's see how the morning session plays out...
Stay tuned for live updates throughout the day, and best of luck out there guys!
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