Friday, November 4, 2016

I think that all the conspiracy theories are wrong

There was AT LEAST as much sentiment that Brexit would be stolen as this election.  You could maybe say that Brexit wasn't as stealable because of all the paper ballots, or maybe they were overconfident? 

Now wikileaks says Trump will not be allowed to win.

One conspiracy says Trump is the one they want to win for the blame game.  This really doesn't make sense.  Does ANYBODY have blame in the eyes of the general public for 2008?  The incorrectness of the WMD in Iraq?  And these people were legitimately at fault. 

The popular vote will probably be enormously in favor of Trump.  I used to think 5-10.  Now I'd peg it at 15%.  In other words, Yuge.  I think that is a factor.  There is no way to convincingly steal this election. 

I think the election will be legitimate.  Of course I can't guarantee this. 

I think the best play is just VIX, both directions, out of the money.  Armstrong says it will be a 3 day reaction, so I'm just going to go out to Friday with it.  If there isn't a big move at all, this could end up bad.  With stocks sliding for 8 days, there is plenty of room to go up with a Hillary win, and with a 7 year rally, there is plenty of room for stocks to flash crash if Trump wins.

Going out just 3 days will keep the options cheap, and you will get a lot of volatility.  Long term options have their volatility reduced by the possibility the price could swing back.

On Friday, according to the array, it's time to reverse the position that wins, but there is a panic cycle also, which is a major monkey wrench. 

Most of the "directional changes" (3rd row from the bottom) that I've followed are mostly meaningless.  I think it just means, moves a lot.  The explanation is pretty vague

"Directional Change
The Directional Change model represents when a market will begin to make a decisive move. A Directional Change differs from a turning point in that the Directional Change target does not need to be the actual high or low.
Example: it is possible to find the intraday high or low take place 1 to 3 time units (days, weeks, months, etc.) preceding the Directional Change target. On a weekly level, the actual high might form on Wednesday while the market moves sideways within a narrow trading band until the Directional Change comes into play, perhaps the following week.

During periods of high volatility it will be more common to find the Turning Point and Directional Change converge during the same time period. This normally occurs when a market is making a spike low or high. "  Armstrong economics.

The safest plays I see
The turning point on Monday, close before the election
VIX out of the money both directions on Tuesday
Wednesdays move lasts through Friday
Friday turning point - but watch the panic cycle (outside reversal or capitulation usually)
Additional turning point on the 16th.

If you prefer, use evolution picks that agree with these general trends.  I don't simply because of the time it takes to keep track of them all. 

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