I view the Trump victory as a trading opportunity. Going into the election yesterday, we raised our cash to 38% and held our 10% silver exposure. We are now buying. I will leg in further over the next couple of days.
What pattern will the market take as it absorbs the reality of a Trump victory? Perhaps the Brexit trade is a good example of what could happen. I’ve posted the S&P 500 chart with notes surrounding that event. I’ve put a line of potential support, should the market start to sell off. However, as I write this on the opening of the market, I don’t see the massive selloff that one might have expected – given the pattern following the Brexit vote. Strange – given the negative moves on overnight futures on the S&P500 as the Trump victory grew closer, then a reality. Then again, the Brexit vote taught investors a lesson – which is to buy on a negative event. Its apparent that these investors are jumping into the market- not wanting to be fooled again. The bargains that were supposedly be present are not all there, thanks to buying by investors. However, there are a few gems that should be considered.
Driving the markets up are healthcare (no surprise) and materials. Sectors that seem to be down the most today include utilities, consumer stocks and technology. I’d avoid utilities given their lofty prices and chart levels. But I think there is a good opportunity in technology, and perhaps select discretionary stocks. That, and the Mexican market, for those with the stomach for it.
My thoughts are to get into the market this week, and try to take advantage of sectors that are experiencing momentary selloffs. I will leg into positons based on specific price targets. This morning I sold my inverse ETF, bought 2 tech stocks, and have other plays on my radar. You might want to consider doing the same.
I’ll be on BNN for the 1:00pm MarketCall show this coming Monday November 14th.
Phone in with your questions on technical analysis for me during the show. CALL TOLL-FREE 1-855-326-6266. Or email your questions ahead of time (specify they are for Keith) to [email protected]