I decided not to upload any more charts until next Wednesday. I find it difficult to even sit down to work on my charts because I'm just not interested. It is a waste of my time. Also, I haven't gone over my watchlist to find opportunities in individual stocks in about a month now because I'm not comfortable given that the market is very news-sensitive at the moment as it waits for the election to be over. It has been chopping around for several months based on the Fed or political news of the day. I just can't wait for the election to be over.
After the election next Tuesday we will see clear movement. Not only because the election will be behind us but also because the market has priced in a rate hike at the next Fed announcement on Wednesday, December 14th at the end of their two-day meeting.
Based on the pullback/bear trap that has been in place recently, I expect a run up after the election.
If Trump wins, I expect a sharp drop that will be followed by a sharp rise forming a V-pattern setup that will go on to make new highs before a bear market starts in April 2017. The excuse that will be given for the sharp reversal higher after the sharp drop is that "the Fed isn't going to be raising rates anytime soon." Another excuse will be that Trump's economic team is appealing. But the real reason is that a bear market can't happen because of news. The technicals need to see problems in the fundamentals (since fundamentals are lagging indicators). So news of Trump being elected can't ignite a bear market.
If Hillary wins, I expect the market to run up because the market wants her to be the next president, and because I see a nice bull pullback taking place at the moment. So we will see a sharp rise as there will be no room for uncertainty given that she will continue Obama's policies. But I believe it will be the last leg of this bull market before the bear market starts in April 2017.
Given that it will be that last leg of the bull market, it will likely be very impulsive as more people will become complacent expecting the same outcome like the Obama era. But that will be a bull trap because the bull play will become overcrowded and not inline with fundamentals. So an inverted V-pattern will develop that will wipe away all the gains made after she was announced the winner. Then the market will calm down at that point and slowly continue the bear market after a bounce.
In conclusion, I expect a bear market next year regardless of who is the next president. I also expect a V-pattern to form (sharp drop followed by sharp rise) if Trump is elected. If Hillary is elected, I expect a rally into next year that will slow down around March as it gets ready for a bear market starting April.
I strongly believe Hillary will win.
