“However (political parties) may now and then answer popular ends, they are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government,” George Washington
THE ELECTION
I’m not one of those guys who will tell you the market will tank if one party is elected, or that it will keep moving higher if someone is thrown out of office, because I don’t know. Naturally we all have our preference tomorrow for various and even selfish reasons.
For this morning’s article, I thought I’d do a little research and see what “generally” happens to things after a US presidential election. Well, depending on who you ask, what you read, or what graph you look at, either nothing happens or everything changes. But, as with most trading, we really won’t know this time around until after things have already happened.
So we may ask ourselves: What do we know?
We know levels, candles and pretty much everything else we use on a regular basis for trading. We know the news coming out tomorrow happens every four years instead of every month or week, but the market has and will continue to behave much the same as it has for a very long time.
EURO ACTION
We know: The euro has held below a significant daily / weekly trendline. For the first day since 9/11/2012 the euro is below the 200 day moving average. The action on 11/2/2012 gave us a very bearish candle close and we probably shouldn’t ignore this.
Where will we stop: Well, this part we don’t know as well. But, putting a Fibonacci retracement on the most recent daily swing low to high (1.200 to 1.315) we can pick a few targets on the downside. Assuming we stay below the 200 day ma, I would be comfortable shorting bounces down to the .382 retracement at 1.272. On the upside watch for daily resistance around 1.300, recent highs and prior resistance between 1.3148 and 1.3240 ish.
On an hourly basis, don’t short the lows, and don’t fight the trend. How does that sound the day before a US Presidential election?
