Market On Open, Thursday 7 November
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Where Now?
by Alex King, CEO, Cestrian Capital Research, Inc
I’m happy we called the election outcome correctly. By which I mean we said Monday (discussed at length in our video, here) that most everything was looking bullish immediately prior to the election; that the Vix was elevated and set to drop, which as a mechanical consequence of dealer re-hedging flows typically causes the S&P500 to rise. So, yesterday we saw moonage across the board, with only bonds selling off (likely due to ongoing concerns about inflation edging back up). Today we have the FOMC result; an expected 25bps rate cut with a Fed Chair facing a new Administration and trying to find his footing ahead of time. Personally I banked some index and sector ETF gains yesterday around the close, hedged some other long index and sector ETF positions, continued to trim exposure to single-stock names, and generally am sat tight looking to see where next. My expectation is that equities continue to rise and I am positioned as such; after a huge up-move (which again, is more a reflection on investors being overy risk averse heading into the election, rather than a result of any particular policy) I don’t mind taking a little risk off the table.
Let’s see what the charts are telling us today.
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