Tuesday, November 1, 2016

Caught In The Trump Vortex aka. Social Mood Implosion

Ironically, this of all weeks Prechter shows up for work: Social Mood is rolling over hard right before the election...

"Market correctly signals outcome 86 percent of time since 1928"

This sets up a very interesting feedback loop which I call the Trump vortex. The stock market had priced in a 100% odds of a Hillary victory as indicated by ludicrously bullish indicators across the board from VIX complacency, put/call ratios, cash balances, Rydex bearish assets etc.

However, now with each passing day towards the election, the stock market has begun to stumble as Trump's poll ratings are rising. As Trump rises, stocks fall, as stocks fall, Trump rises. It's a social mood vortex...

Google Trends Search "Change early vote":

I use the Mexican Peso / dollar exchange rate (red) as a proxy for Trump's poll ratings, overlaid on the S&P:

"The stock market is not going Clinton's Way"

A closer look at weekly momentum (Relative Strength):

Unfortunately for Zombieland, the Pro-Globalization candidate was 100% priced in:

Internet stocks with cash balances:

Facebook reports after the close tomorrow. What could go wrong?

True Elliott Wave types would say that this has nothing to do with Clinton or Trump. They're just along for the Social Mood bus ride.

That's where I stand.

Growth / value ratio:

However, I also look down on 8 years of bullshit to cover up non-stop corporate outsourcing. Something Prechter never factors into his model aka. reality. 

Because Social Mood doesn't mean jack shit when you hit the fucking pavement:

As long as Facebook meets its 70% analyst-expected growth rate and gives an uplift on forward guidance, this will all be fine...

One year ago the Fed set the stage for a December rate hike. Just like they're going to do tomorrow...