The Dump Before The Election

THE WEEK

After drifting sideways for a couple of weeks, the Market broke down on larger than normal trading volume on Thursday.  It was the last day of the month.  It appeared that many traders were dumping their losers before the Presidential election results.  Naturally, the VIX which tracks trader sentiment, reacted and is now in what I call the uncomfortable area.  Trading volume was also high on Friday.  However, prices were flat.  The Market and the nation is in a wait and see mode.  Hopefully, we will have our answer on the Presidential election on Wednesday and we can then decide how to trade the next ensuing Market drama

LOOKING AHEAD

What a week it will be for the Market.  Not only are we in the midst of the heavy earnings announcements for this quarter, we have the election on Tuesday and the FOMC decision on interest rates on Thursday.  

The FOMC will meet on Wednesday and Thursday and then announce its interest rate decision at 2 p.m. ET on November 7th.  This will be followed by a press conference with Fed Chair Jerome Powell at 2:30 p.m. Economic projections are released at every other meeting, and they were last updated in September.   So, they will not be updated at the November FOMC meeting. Minutes of the meeting, offering greater color on the decision-making process, are then typically scheduled to be released three weeks later.

My best guess is the Feds will again lower interest rates .25 basis points after the initial first cut on September 18th.

HOW AM I DOING?

Kind of the same as I have been doing for the past two weeks prior.  The Market sideways Price Action we saw last week with a sudden down is hard for me to trade.  I had alerts and Good Till Cancel orders on.  But overall,I treaded water with just a small gain for the week.  For the month of October, I had a gain of 13.9% while the SPX was up 7.0% for the month and NASDAQ gain only 0.4%.  

One the things good trader do is figure out ways to adjust when things aren’t going as well as planned.  That is what my team and I have been working on – a ways to trade and show consistent moderate gains in the Market good times and also in the chaos and uncertain times.  A consistent weekly win is what we all dream about.  We are almost there and will roll out our new trade very soon.

Thursday’s Webinar Topics

We will be continuing the study of Portfolio Margins this Thursday.

Every trading platform has slightly different rules and set-ups.

Our review will focus on Charles Schwab Platform.