We have a potential large head and shoulders that could develop if we see a continuation of this S&P slide.

And to the guy who asked me if I know whats going to happen via email did I not tell you to get out of the markets at 2180 S&P 18500 DOW?

While I've made it clear that we don't know where the next big move takes us yet we are in caution territory and people should have been on the sidelines with nothing but smiles right now.

If you are 100% out of the 401k and not constrained by the 30 day rules some are handicapped with AND you think the markets are gonna bounce from here put 25% back in. I'm not touching it and have already captured and protected the short positions from the high caution alert.

jake2011 said:

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9 down days in a row misleading only down a little over 3%

Down 8 in a row in 08 over 20%

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3% vs 20% certainly a different outcome but it was, in fact, down 9 days in a row. The thing about this time is it isn't a technical macro move/indicator but a political one. Big money actually think Trump can win this election at this point.

http://www.zerohedge.com/news/2016-11-04/market-indicator-gives-trump-86-chance-winning-election

The bull signal early in trading yesterday played out technically pure. Based on current futures we would open in record territory and unless a reversal were to occur today a return to a bull market move upward is coming. It is looking like AMZN is going to break the gap trend as long as the markets do not reverse off a strong open. SHOULD THAT AMZN gap get filled then, just as it was creating caution, it would complete a full on bull market signal. Entry into the markets would be less critical than going ahead and putting your capital back to work. Remember that we've had 2 years of sideways movement and this would be a breakout of that pattern, something not to be ignored.

This election has everyone and everything turned on its ears. The fact that we have a fully Republican lead government is historical in its own right, considering the political climate. The markets are clearly showing that they are betting own Trump, and who wouldn't given the impossible?

As the world and investors digest what just happened there are some keys to fundamentals based on a Trump lead country.

1) Has anyone mentioned the incoming President is a construction guy, who has listed building infrastructure as one of his prime tenants? Well you can post your best funds available in your 401k's that are heavy in U.S. companies that serve this area. This would be my 100% best and heaviest placement of your long-term investment monies. Individual stocks like Caterpillar are no-brainers and part of my largest call options yesterday. Take a look at the volume in that one stock yesterday to get an idea of big money's thinking/agreement. Another thing about CAT is the $100 mark it has not broken. Like a magnet it will be drawn to that and then flash above it (something for the trading thread short term). Notice also that it just broke over it's previous resistance highs. DE is another stock in the magic 90's. Deere will run like one. EDIT TO ADD: Beyond the other sectors listed the other obvious I forgot to list would be those supporting defense, with military build up.

2) Capital Gains and Corporate Taxes: Another promise Trump made was to reduce the capital gains and corporate tax. WOOHOO! That sounded good but now it sounds great, because he has a full government control to make it a reality. Trickle down economics is going to be a flood once this is passed. Businesses sitting on billions will unleash the hounds.

3) $2.5 trillion. TWO POINT FIVE TRILLION could be a magic number. Trump's stated negotiation with U.S. companies with overseas accounts parked with this amount, to avoid U.S. taxes will be fascinating to watch. IF he manages to pull off a repatriation of those dollars then he'd go down as the most successful fiscal policy President in history IMO. His idea of inner city redevelopment attached to tax incentives and a reduced tax on any of these dollars coming back into the country would fuel topic #1 above even further.

There is a current reality in economic growth and Trump isn't even in office yet so the enthusiasm in all of the above is taking the markets higher. Those huge "ship" fund managers take weeks to get positioned, so dip buying opportunities as we continue to have a mix of bad data and anticipatory/forward looking optimism will allow for entry.

If you believe that a CEO President, hellbent on rebuilding the country's infrastrure (CAUSE), will put people back to work (EFFECT) then increase/take positions in the sectors listed yesterday and today. Then look for entry opportunities certainly to come. The FED is certain to raise interest rates at their next meeting. This should provide another entry opportunity.

My take? BET ON TRUMP