It’s off, no, it’s back on!  Yesterday’s nasty whipsaw demonstrated just how sensitive, emotionally charged, and dangerous the Presidential election’s path forward has become.  I want to say I believe the worst is behind us, but I don’t think that’s right, and traders could be caught in the crossfire.  With so much wild volatility, it is nearly impossible for swing traders to maintain an edge, and sadly that may be the case through the election.  The path forward is clouded in uncertainty, so plan your risk carefully or choose to stand aside until the clouds lift.

Asian markets closed mixed but mostly lower overnight in reaction to US Stimulus news.  European markets trade in the red across the board this morning as stimulus fears weigh on the investors.  Ahead of a big day of Fed speak, and the FOMC minutes, US Futures once again point to a significant gap in hopes that at some stimulus may still be on the horizon.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have just seven verified quarterly reports.  Notable reports include LW, RPM, & SAR.

News & Technicals’

Yesterday I titled the blog “Silly Season” but had no idea just how correct that sentiment would become.  As I’m sure you all know, the President pulled out of stimulus negations suggesting the other side was not working in good faith.  However, this morning, the President asks Congress to move forward on a bailout deal for airlines and direct $1200 payments to the citizens removing money for what he calls mismanaged states.  Nonetheless, the action created a nasty whipsaw yesterday with the market having already priced in a stimulus deal.  I wish I could be confident the market turmoil and uncertainty is over. Sadly, I think there is a genuine possibility the political uncertainty and market sensitivity to the news cycle will continue through the election.  After the bell yesterday, House Democrats accused Facebook, Amazon, Apple & Alphabet of having monopoly power, recommending significant changes and challenges could be on the way for the tech giants.  With these companies holding huge index weight, market growth may become problematic if the political pressure grows.

As a result of yesterday’s whipsaw, the SPY and QQQ closed back below their 50-day moving averages.  However, with the hope of some stimulus still on the horizon, US Futures are poised for a bullish open that could recover these critical psychological levels today.  That said, be prepaid for move wild price volatility ahead.  We still have price resistance above in the index charts to deal with and a path forward fraught with high volatility danger as the political silly season come into full bloom.

Trade Wisely,

Doug