Vaccine Hopes, Holy Shift!

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…

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