Update: Since posting this only a few minutes ago the futures have exploded on optimism over a vaccine. Technicals are out the window – this market is operating on raw emotion and hope at this point.
Original blog (prior to folks going bananas):
While the ink is not formally dry (because, technically, there are still lawsuits and other challenges) it appears the Biden/Harris regime will be taking the reigns in DC shortly. This means shakeout for the markets, at least technically speaking. The new regime brings potentially new fiscal policy, trade policy, and a host of other changes. All of this will begin to start pricing its way into expectations. The question is when? (And true, the efficient market folks will suggest it’s already priced in there. Of course, we don’t even know what it is yet.)
So far, markets appear to have gotten what they wanted. Most indicators suggested Biden would win, and the biggest point of optimism was around the idea of more market economic stimulus.
It’s pretty early to divine much from technicals… at least not yet. The weeks leading up to the election saw increased volatility and big jumps both up and down, so there’s not much to pull from trend-wise. Plus, as is political tradition, many of the promises made must now be walked back or nuanced in such a way as to suggest they’re still kept promises, even though they no longer resemble what was actually campaigned upon.
In the case of Biden’s tax policies, once can only hope they end up more moderate than the extremes that were hinted at to the more radical side of the progressive aisle. We shall see.
Looking at the futures, there’s yet another spike higher. This makes it likely for the S&P500 to challenge its all-time highs. So, for now, the theme simply appears to be optimism.
We’ll keep it simple this week. Below is the rough map of where things are headed — but it’s pretty loose. Not much to work with yet…
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the BigFoot’s current written disclosure statement discussing our advisory services and fees is available for review upon request.