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Keeping things very simple here. The only thing I am concerned with, the election results. Certainty is likely to be rewarded. Uncertainty is likely to have consequences. If there is a clear winner when it comes to the President I expect the equity and commodity markets to react positively. Conversely, if there is not a clear winner Tuesday night, or even Wednesday morning, I expect the markets to react negatively. Prepare accordingly.
If Monday’s price action occurred on any other day I would have been impressed by the reversal. The fact that this turnaround occurred just before Election Day, on a day where the S&P recovered from the lows as well, makes me skeptical of this sudden rebound. To have a case for an early seasonal bottom the bulls will need to promptly build on Monday’s price action. No follow through, no bottom. Watch the S&P. Watch ULSD.