Wednesday, November 9, 2016

S&P 500 E-Mini Futures Dramatic Trump Crash and 'V' Recovery

Last evening when Trump appeared to be gaining in the election results, the S&P futures began crashing. The e-mini's fall from 2150 to 2030 a -120 handle intrasession flush lower. At  that time between midnight and 2 AM EST, it was obvious that Trump would win and he went over the top with the electoral college vote. Clinton called to concede which is the initial move off the bottom. President Elect Trump speaks after that and provides a gracious speech without bloviating any insults. Trump was very presidential and the S&P's begin ramping higher never looking back. Less regulation will create bigger profits for corporations. Trump also promises tax cuts and infrastructure spending to stimulate the economy. Pharma companies rally since Clinton's agenda of attacking price-gouging in the industry is now dead in the water.

An amazing V shape pattern like Brexit occurs only that happened over a couple days and this Trump victory V pattern event played out in hours. You can see a bull flag pattern plain as day, first leg from 2030 to 2110 call it 70 to 80 handles. Then the sideways consolidation flag with a lower bias and then price begins the second leg higher from 2080 so the target would be 2150-2160. Bingo, we are there.

As a side note, pay attention to the UTIL 50-week MA at 650. Price has failed here and this represents a trap-door for the stock market. Bulls need to move UTIL above 650 as soon as possible or they will be in trouble. If UTIL remains below 650, the stock market will trend lower for the weeks and months ahead. UTIL is at 648 as this is typed. When the trap-door opens, the SPX typically flushes 20 to 30 handles in quick order but today so far the bulls are propping up the markets. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

NOTE: Chart is courtesy of and annotated by Keystone.

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