Monday, November 7, 2016

Will Down Seven Days Cause A Face-Ripping Clinton Rally?

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*Clinton is ahead in most electoral college polls with two days left to go.
*Most traders have Brexit on the brain so are pricing in a surprise Trump win which could cause a market crash.
*The risk/reward would set up that markets can go up, not down.
*We go back in history to see how stocks reacted after such a bad stock market streak.

The Dow Jones is down seven days in a row. There is a lot of bearishness going into elections. Either candidate can win but it looks like Hillary Clinton has maintained a meaningful lead in the electoral college which is all that matters. If she wins there should be a nice relief rally in stocks.
Electoral College Is What Matters
We'd admit this election has elements of the unknown. Disgruntled Americans that didn't show up in polls could come out and vote for the first time and vote Trump. Voters could also turn at the last minute while in the voting booth and come to their senses about either candidate.
Mitt Romney had 49% of the popular vote going into the final days. John Kerrywas also close in the popular vote. Both of course lost by a wider margin in the electoral college.
Hillary Clinton though has shown a clear lead in the electoral college consistently.

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