[OP Ed. Note: This Editorial Was Drafted Without AI]
Yo Pit Crazies,
Why do stocks jump or sell off after earnings? Witness Alphabet (GOOGL) this past week.
1-Year GOOGL Chart
Traders got the news, saw the Free Cash Flow go negative and can see clearly the next 3 to 6 months and they vote with their sell ticket.
The elections are very similar in that traders want to see what the next two years are going to look like.
2016 Shook the Tree
When President Trump was elected the first time, that is the first time I recall VIX really getting a bid into the election.
For the 25 years prior for me, it was a thing but not really too big of a thing.
The issue now is that there are larger agendas in place. The government is channeling record dollars to favored segments of the economy. It is not new, just way bigger.
Witness the record prices for Green Energy in the Biden Administration in 2021-2022.
Traders were paying anything for Green Stocks since the Biden Administration but it as a priority. Frank Gregory with me in Cap Gains made the call that Green Energy will require fossil fuels and it set up a great long term trade in oil stocks for me.
Post Election, Investors can see two years forward
Traders and investors can deploy money after the election.
They might not like the election results but they have 100% clarity on who is running the show and what they might expect. The election is just one big earnings play for the broad market and VIX.
Since 2016, it has become a great trading opportunity. More on that next week!
Speaking of election:
We have an election extravaganza coming Nov 2-4. Hosted by the inimitable Garrett.
I will be guesting to talk about how the election is going to affect my investment choices in what I want to protect, jump into and get rid of.
Tap this to claim your free seat and add the event to your calendar.
This isn’t just a run of the mill small town mayoral election. Midterms are a big deal. They affect policy and the way money moves.
And I have this sneaking suspicion that the upcoming election is the only thing holding this market together.
So make sure you come join us next over the next three days.
I hope this was helpful,
AG