Futures Plunge As Democrats Sweep Congress. Smart Money Buys The Dip

If you watch market futures like a hawk, like I do... then you saw the volatility ramp up around the time it became clear Democrats were going to sweep... 

Last time we saw anything like this was when Trump won - the first time - and Dow futures plunged 1000 points - which was a big move... in 2018. Futures traders were dead wrong, and the market snapped right back, at the open. Similar to what we saw overnight.

"Technology stocks took a hit (down as much as -2.4% at one point) as investors worried about tougher AI regulations. (ibtimes.com)" Pure narrative spin: Truth is, nobody knows who was dumping or why—idiots selling the news, and algos aiming for a liquidity flush, are a dime a dozen.

Apparently someone didn't get the memo: Asian traders perhaps over-reacting, algos selling the news, midnight gamblers? Prediction markets got it right, and Wall Street has already been pricing in a Democrat House, and Senate, since the end of the summer.


It was hilarious watching the political talking heads attempt to explain away market futures falling off a cliff - as they attempted to hide their utter exuberance. They even act like they don't know that the Dems have promised to go after Elon Musk - even this morning as Tesla and SpaceX are tanking.  "Democrats have a message for Elon Musk: Watch out!" (politico). 

The Sector Rebalance The Talking Heads Also Don't Like To Talk About

1. The defense sector has been absolutely obliterated (less war spending)
2. Healthcare & Biotech making new highs (healthcare for illegals) - even European traders are excited about the prospect of universal health. 
3. The AI/Tech sell-off (more regulation = less data center building)  
4. Higher Taxes on employers (aka "the rich"? No, Trump still has veto power.
5. Climate spending returns - this one could be veto-proof. 
6. Energy Deals can be priced out.  
7. Trump Impeachment unlikely. 

For The Time Being Most Things Should Remain Mostly Unchanged  

• The republicans are NOT contesting the election results.
• Trump has already offered an olive branch to the Dems
• Corporations still own our politicians in Washington = AI investment will continue to ramp up - rest assured - regardless of the rhetoric.
• Out of control spending will continue - the Uniparty system guarantees it.

So Now What? Now, A Relief Rally - $VIX is already being crushed in pre-market down nearly (-20%). Trust that over the fake news headlines. 

Same sector I mentioned in yesterday's blog [linked] - start reading - halfway down the page. Spoiler: The only sector that can lead... BIG TECH.


I no longer like small cap value; after its recent blistering run. I do however like the same sector chart I offered a few months back...

$PNQI (NASDAQ Internet ETF) just landed right on its 200-day SMA. That is the exact technical signal triggering machine buying right now.

#ProTip: Don't rush in - wait for trades to settle at the open. 

There are plenty of trades to be found, just remember the selling was overdone in certain sectors, while the buying was overdone in several others.  

Tweet