The next 48 hours are going to be terribly revealing – – it will be fascinating to see how the markets react to the election results. I imagine any big move will peter out by the middle of Thursday. If we get a sharp rally, I will take that as an opportunity to (a) sell off some of my more profitable longs (b) get into more short positions. As you can see from my watch lists, I have a bevy on both sides of the aisle. In just one of my accounts, I have 70 longs and 57 shorts! It's quite a mix. And even though 53.68 seems high on the VIX, we've come down over 40% from the peak. A big upward surge in equities could push the VIX down to under 40, which I'd take as an even better opportunity to short.
I remain long FXP and FXP calls. Some people have complained about losing money on this. What, do you want to catch it at the exact right second? I don't mind some froth. I feel good about the possibilities of this short.
The big ETFs are all mashed against their 23.6% retracement levels. An election surge would easily kick these up to the next level higher, but I'm already entering some put positions just in case we fall.
The ES e-mini has been boxed into an 825-1000 range for a couple of weeks now. The "exciting" part of this phase of the bear market ended October 10th. We've just been farting around ever since.
To quote Trading Goddess – – look at the volume! Or lack thereof. Today was the lamest volume since August, and that's saying something.
Here's yet another view of a major index. Each 1,000 will hold as resistance, or we'll take a final fly up to about 1070.
My Dow Jones utility short (via SDP) is a favorite of mine. Even if we surge up to 415, I'm hanging on.
I did after all wind up buying puts on the OIH. I'm somewhat conflicted about this, because crude oil could make a major push higher. I've got a relatively tight stop on these puts at 102.92, which was October 21st's high.
Finally, just in case you missed my little video creation from Halloween night…………it's worth your time:
