U.S. Stocks Rally, Contested Election Imminent

U.S. stocks are trending higher following Tuesday’s historic U.S. election. The result of the 2020 presidential contest is in question as ballots continue to be tallied in several battleground states. At press time, Democratic challenger Joe Biden is ahead in the key states of Michigan, Wisconsin, and Nevada. Barring a major surprise legally or in the late vote count, Biden will be the next POTUS.

This morning brought the release of several economic indicators. In all honesty, they pale in comparison to the election news and aren’t primary market drivers. Nonetheless, the highlights are lagging ADP Employment (Oct., 365K) and a subpar ISM Services PMI (Oct., 56.6). Both numbers slid from previous levels and disappointed expectations.

Despite the uncertainty, U.S. stocks are roaring. Just past the halfway point of the session, the DJIA DOW (+707), S&P 500 SPX (+104), NASDAQ (+461) are all trending higher. It looks like institutional capital isn’t too concerned about the delayed outcome of Election 2020. 

Election Outcome Pending, DJIA Breaks Out 

December E-mini DOW futures are up big on the day. Subsequently, rates are back above 28,000 and pressing higher.

Here are the key levels to watch moving into the late-session:

• Resistance(1): 78% Current Wave, 28,210
• Resistance(2): Daily SMA, 28,338

Bottom Line: If the post-election gains continue for the December E-mini DOW, a shorting opportunity may come to pass. For the rest of the day, I’ll have sell orders in the queue from 28,324. With an initial stop loss at 28,357, this trade produces 25 ticks on a slightly-sub 1:1 risk vs reward ratio.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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