THE ELECTION YEAR INFLUENCES THE STOCK MARKETS
super Tuesday uncertainty becoming certain in this current market and once it is gone it will present trading opportunities.
There has been a lot of political uncertainty in the US lately regarding the Presidential Race. Up to Super Tuesday there had only been 4 primaries and on Super Tuesday there were 12 States that had their primaries. This made it the most states in any single day and the most delegates won in any one day. Speculation ran rampant about who would win these races.
Both Hillary Clinton and Donald Trump had big wins on Super Tuesday but there is some uncertainty in the Republican Party regarding Donald Trump’s nomination however the front runner has been picked. This clarity should help give us a trading direction to the uncertain and hesitant markets. I am not in any way picking a candidate or a political view rather I am discussing the uncertainty in these markets. During the political campaigns there has been much rhetoric on the state of the US economy to try to exploit this for political gain. There have been 23 trading days in 2016 where the markets have moved more than 1% in a day up or down. That means on average there has been at least 3 days in a week that markets have moved 1% up or down due to this uncertainty. Currently the US economy does not look to be in a recession or heading that way thus the bias at this point for the market is to the upside. Markets in the short to mid-term have done well historically after Super Tuesday. The volatility Index is now below 20 and the 10 year treasury yields are moving higher showing that the uncertainty is leaving the market. I am not calling a long term market bottom but in the short term it seems we have hit a bottom. Now that it is behind us there are many trades presenting themselves especially for those who have been waiting on the side-lines for a clear market direction. This is why having a stock shopping list ready to trade when markets settle will put in a position to make money on market moves.