Election Results Incoming. Expect Volatility For SPX. Plan for November 6th.

Today is election day and it started off with a bang. As readers recall, the active setup heading into today was my core setup: A picture perfect bullish failed breakdown which triggered yesterday when we lost Thursdays 5734 lows, and recovered. This meant longs into today, and they paid out massively. I wrote yesterday:

“There is an active failed breakdown present where we lost the Thursday lows at 5733, flushed it, and recovered. This means it go time and if bulls drop the ball here, it could fall apart quite quickly. Generally, the bull case for tomorrow would be that this zone holds. This means we go no lower than 5734 ideally.From here, we rally up the range. This would mean push back to 5770, perhaps a final reaction, then squeeze to 5781, 5798-5802+”. This played out to absolute perfection today and we held 5734 last evening (5735 was the low), then rallied to 5798-5802 by noon. This was a 66 point move with 0 drawdown.

However, given this is election day, this move is just the start, and election days are unique as much of the action is concentrated into the evening/overnight session, creating an effect whereby election days essentially have two “regular hours” worth of volatility in a single day. The actual regular hours which we just completed, then a second one beginning at 6pm.

Can bulls keep the strength going into tonight? In today’s newsletter, I’ll talk this, I will go over exactly what these post-6pm sessions looked like in the 2016 and 2020 Presidential Elections. I’ll then discuss the actionable trade plan for tonight and tomorrow. You are going to need to know how to trade Failed Breakdowns