Intraday Market Thoughts

Five Things to Watch on Election Day

by Adam Button
Nov 7, 2016 23:50

We have finally arrived at election day and it's with a flurry of risk-on trades as the market senses a Clinton win because of the FBI dismissal, polls and Democratic turnout numbers in swing states. The FTSE short in the Premium Inisghts was closed at 6790 from entry 7060, for 270-pt gain. NZDJPY was stopped out. The latest video of charts & trades for Premium subscribers is below.

1) Watch the Clock

The market is leaning heavily towards Clinton and that may continue through what should be a quiet 24 hours. Beyond that, the focus will start on the US east coast and move west. Polls from parts of Florida will hit first at 7 pm ET. Exit polls will be the first indication but real data should follow close behind. Thirty minutes later, numbers from North Carolina and Ohio will hit. If Clinton wins any of those states, it's almost surely all over.

2) Trump Has No Room For Error

Every realistic scenario for Trump getting to the White House requires him to win Florida, North Carolina, Ohio and at least two of New Hampshire, New Mexico, Colorado and Nevada.

3) Watch the Breakdowns

As state numbers are reported it will be important to understand exactly which counties they are coming from. As a strong rule of thumb, urban areas favor Clinton and rural lean towards Trump. If Trump is ahead in Florida (for example) in the first results that cross, it may be a false signal if results are rural and vice versa.

4) Clinton is Done if she Loses the Great Lakes

Ohio and Indiana may go towards Trump but Clinton likely can't afford to lose any other contested state bordering the Great Lakes. That means, Minnesota, Wisconsin, Pennsylvania and Michigan along with New York and Illinois (which will surely got to Clinton). If she loses any of those, she's almost certainly done.

5) Don't Wait for the Networks

The 'sell the fact' trade on election day will be on the official election calls from the main networks and newswires. These generally land around 11 pm ET when polls on the west coast close. Media organization are ultra-cautious after the 2000 election debacle but markets will have figured it out already. Look for one final burst of momentum on the official calls but that's likely to be the time traders start to take profits.


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