As the votes continue to be counted, it has become apparent that the pollsters couldn’t have been more off predicting a Biden win by a fair margin. It ain’t over to the fat lady sings, or until one of the candidates receives the 270 electoral votes needed to secure the presidency but as of now, the race is too close to call & appears to be pointing towards a Trump win.
What we do know is that as it started to come apparent that not only was Biden not a shoo-in, as the polls had predicted, but that Trump may quite possibly take the election late last night, the /NQ Nasdaq 100 futures made an impulsive breakout above the 60-minute downtrend line/price channel, thereby triggering a significant buy signal. While this breakout may prove to be a whipsaw signal, especially if the remaining swing states that in which Trump currently leads end of going the other way, as of now the impulsive nature of the breakout & fact that /NQ is trading well-above the downtrend line (as well as the current trajectory of the election results) make it likely that the breakout will stick. Should this breakout stick, that would be the first “swing trade” buy signal in a while.
NQ 60m Nov 4th
The S&P 500 futures continue to build on the gains following the recent divergent low, downtrend line breakout & successful backtest. /ES is currently testing this downtrend line (resistance) with some whippy early-session price action resulting in typical spikes above & below the trendlines. 60-minute chart below.
ES 60m Nov 4th
SPY is also starting to crack above this 60-minute downtrend line in the pre-market session (white candles) as the odds for a Trump win continue to increase.
SPY 60m Nov 4th
With 2-hours still left before the opening bell, QQQ is currently poised to gap comfortably above the 60-minute downtrend line while trading just below the top of the Sept-Oct trading range (bullish if it makes a solid break above the range).
QQQ 60m Nov 4th
As discussed in some of the videos over the past few weeks, the market had been pricing in a Biden win, which (although still possible) would have (or will) come with his support for clean energy. I had highlighted the solar sector & many of the solar stocks as having what I perceived to be unilateral risk, mostly or all downside risk with little upside potential, despite who takes the office, as the huge gains in the solar stocks since the March lows appear to have fully priced in a Biden win. As such, should Trump be reelected, there may be some attractive shorting opps in select solar stocks and/or the solar ETF, TAN. My daily chart of TAN with some potential targets & support levels, including the primary uptrend line, is shown below.
TAN daily Nov 4th
On a directly related note, the oil & gas sector has not fared well recently, with XLE pluging 42% in recent months. However, as highlighted in a video earlier this week, XLE as well as the other oil & gas energy sub-sector ETFs, such as XOP (exploration & production) and XES (equipment & services) stand out as one of the more bullish setups at this time with a Trump win likely to be the catalyst for a potentially explosive rally.
XLE daily Nov 4th
XOP daily Nov 4th
XES daily Nov 4th
Most of all of the coal stocks that I was bullish on a couple of months ago would also most likely be beneficiaries of a Trump win. I will follow up with some of those charts with potential price targets & buy triggers in another post or video asap.