elections, politics, and a trade thought
15 responses | 0 likes
Started by bear - Dec. 31, 2020, 8:45 p.m.

a person may want to have an option spread going into the georgia election. 

if the dems happen to pick up a senate majority,  i expect the dollar decline to accelerate. 

if the pubs hold the senate, then we should see a dollar bounce, and maybe a trading range for a while.  

gridlock might mean less  currency debasement.  

just a thought.  

By joj - Jan. 1, 2021, 8:03 a.m.
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Along similar lines, I was thinking the GA runoff might be a buy the rumor (US stocks) sell the fact of a GOP victory.

By TimNew - Jan. 1, 2021, 9:42 a.m.
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Are you saying a GOP victory will be bad for stocks?

By metmike - Jan. 1, 2021, 3:05 p.m.
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If that was the case, then a GOP loss would be REALLY bad for stocks.

By joj - Jan. 2, 2021, 7:17 a.m.
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You never heard of buy the rumor - sell the fact?

By metmike - Jan. 2, 2021, 3:55 p.m.
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Yes and buy the rumor, head for the hills if it turns out to be wrong(-:

Buy-the-rumor-sell-the-fact meaning




'Buy the Rumor, Sell the News' Forex Trading Strategy


In such an instance, one trader takes time to digest the news before making a trade, while other traders act impulsively as soon as the rumors come out. Slow-to-act traders often provide the liquidity for in-the-know traders to take advantage of either the "rumor" or the "news."

  The Bottom Line  

When a positive news event comes out and the price rises, entering on that positive news release can potentially be the worst time to enter the market. That is the time when everyone else who bought the stock at the lower price may be getting out of the market to reap a profit.

There are few things in forex trading more frustrating than being the source of liquidity for other traders. One of the best ways to avoid this fate is to wait for a retracement after a good news event—a brief reversal in price direction—to buy at a better price.

By bear - Jan. 2, 2021, 9:46 p.m.
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a gop loss may not be really bad for stocks.  it might be really bad for the dollar, and the bond market. but... if dems want to ramp up spending, that benefits corporations.  

stocks are grossly overpriced (by almost all measures, price to earnings, price to sales, etc), and are higher than most previous bubbles by most measures.  but... lots of govt stimulus may keep stocks elevated.  

by hussmans calculations, stocks will go nowhere over the next 12 years.  

By TimNew - Jan. 3, 2021, 7:01 a.m.
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Spending is good for corporations.   Taxes and regulations are not.

By cutworm - Jan. 6, 2021, 6:40 a.m.
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It would seem that the NASDAQ does not like the election results. currently down 263

US $ new lows for the move

By cutworm - Jan. 6, 2021, 6:50 a.m.
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T bonds are down big , continuing the down trend. Currently down 1.56

By joj - Jan. 6, 2021, 7:24 a.m.
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Considering that oddsmakers had GOP candidates as the favorites, I would have thought the market would have gotten hammered more.  S&Ps barely lower at this point.  Normally, that would have suggested underlying strength.  Like when the market would stumble and recover every time trade tensions with China got ratcheted up a notch.  

In this case I don't know.  Perhaps the markets don't think a corporate tax increase is a sure thing with a 50-50 senate?  Or, perhaps with McConnell removed, an infrastructure bill will be in the offing, providing a stimulus boost.  

 Interesting times...

By TimNew - Jan. 6, 2021, 10:03 a.m.
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Not at all what I would have expected.    DOW and SnP up, DOW strongly. NASDAQ down,  but not badly.   Gainers/loosers at 4096/2335 at last check.

I am missing something large.

Not paying as much attaention as I once did,  but ADP is showing a net private sector job loss of 123K.

WTH are they looking at?

By metmike - Jan. 6, 2021, 11:30 a.m.
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Maybe there were alot of buyers on the sidelines waiting until after the results and many expecting this already.

By joj - Jan. 6, 2021, 11:38 a.m.
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Economists make horrible traders.  But thankfully, most of them are aware of this and tend to shy away from trading.

By bear - Jan. 6, 2021, 12:03 p.m.
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stimulus may not benefit facebook, but it will benefit companies like cat, deere, construction, materials, etc. 

and higher interest rates may benefit banks which do well with a larger spread between short and long rates.

By wglassfo - Jan. 6, 2021, 12:28 p.m.
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Hi Tim

Agree with Bear

1st hand experience

We sell a lot of product to one of the Co's bear mentioned

Their biggest problem is keeping the line going with covid stay at home absent from work

But they keep on pumping out machines and sales are good. Hard to believe but true

Stimulus money to help pay wages etc. ,any thing the Dems do/spend is good for biz

Green Deal remains to be seen but if it hurts biz then adjustments may be in order. Perhaps not so much for foreigners and more domestic spending like solar etc.

Fed is looking at an average 2% inflation way back to yrs past

Some may see stk inflation and don't want to miss out

Who knows but Wall St is buying. Lots of M1 money sloshing around looking for ROI. Look at a chart for M1 money

Wish bear was wrong on int rates