WASHINGTON, November 7, 2016 – You can tell the silly season is truly upon us when pretty much all TV’s blow-dried cadre of phony financial pundits—nearly of them Hillary supporters (except perhaps Lou Dobbs and Rick “Tea Party” Santelli)—are attributing today’s massive stock market rally to the virtual certainty that Crooked Hillary will win the White House on November 8.
That’s lovely to think if you’re a left-wing Democrat or an idiotic businessman who supports that party as a way of virtue-signaling. But U.S. stocks are rallying today because the nearly always reliable McClellan Oscillator bottomed hard on Friday, making a huge, violent rally a virtual certainty for either Monday or Tuesday, regardless of what’s going on at the polls.
Rallies like this one usually happen because the technical get so bad that they have to reverse. Furthermore, this reversal is being fed by the largely false reports that jobs, salaries and the U.S. economy in general have never, ever been better, largely due to the genius in the White House and the even more impressive genius that’s sure to follow.
In any event, Friday’s naysayers have become Monday’s Believers. Stocks took off so fast this morning to the upside that the rally automatically gained steam by destroying heavy short positions during its steep and perhaps unexpected assent. What we’re seeing today is some election-based partying, to be sure.
But most of this rally can be pinned on the near-certainty of a market reversal based on information provided by that old, reliable McClellan Oscillator. So, BANG! Up we go, and the shorts get slaughtered in a massive short squeeze that’s dropping body parts in Manhattan, on Long Island and beyond.
As of 2:30 p.m. EST (did you turn your clocks back?), the Dow Jones Industrials are up a stunning 323 points and change, approaching a whopping 2 percent on the upside. The broader-based S&P 500 is up an equally impressive 41.30, just about a 2 percent gain on the button. And the tech-centric NASDAQ, which was nearly decapitated last week, is up a huge 109+ points, a nearly 2.2 percent gain.
What does it all mean? Who knows? The short squeeze should be done fairly soon, as is often the case. It could very well carry through past Tuesday and beyond. But tomorrow’s vote, no matter what the polls and pundits say, is going to be something like Walt Disney’s old “Anything Can Happen Day” on the Mickey Mouse Club TV shows of old. Both events and the markets regularly make liars out of the self-appointed wise, and that’s likely to happen yet again. So the Maven will watch and wait and see if America is ready to rebel against official Washington or whether the country is now well and truly past it’s “Sell by” date.
So, too, with the market. We’ll just watch and wait and hope we have enough cash to weather the good and the bad that will happen on Tuesday.
Trading Diary: New Series Announcement
We’re using this space today to inform our readers that this segment of the Market Maven column is moving to our somewhat neglected alter-ego column, The Prudent Man, effective today.
Rightly or wrongly, internet readers have only so much patience before they click onto something else in this vast, short-attention span theater. So segmenting what we write into one column that highlights market-moving news and sources and another that focuses on specific trading moves is the way to go.
So, henceforth, Market Maven will be all about the world and the way it influences over all financial markets, while Prudent Man will primarily focus on the trades and long-term holds we’re investing in in order to survive and perhaps even prosper during a time when our once-wonderful country has disastrously lost its focus on those skills, traits and positive attitudes that once made America the greatest place on Earth.
Have a good one. And, unless you’ve already voted in some way, shape or form, good luck in avoiding any trouble at the polls on Tuesday, particularly if you happen live in a densely populated city or region. This has not been a nice year.