The indexes started strong on Monday morning, dipped into negative territory for a while, and then accelerated into the finish. I'm hearing endless talk about the impact the elections will have on the market, and it looked to me like buyers decided to add exposure in front of what they hope will be a decisive win for the Republicans. The question now is whether we are setting up for a "sell the news" reaction if the election results are not as they appear they could be. There is also the risk that vote counting could be an issue in some close races.
We will have more positioning in front of the news Tuesday, but the good news is that Apple's (AAPL) warning about supply chain problems and Meta's (META) warning about substantial layoffs did not have any impact on the market. There is some bad news out there, and the market is ignoring it right now as it looks ahead to the election and the consumer price index report on Thursday.
Anything that happens in the next two days is just a prelude to the CPI report. If this rally continues and there is a further runup into the report, then we are going to have the same sort of setup that we had last week in front of the Fed decision that ended in an ugly selloff.
Currently, we have positive sentiment at work, but there is a very high level of choppy action. Some very good earnings reports are getting sold hard, but there also are some strong pockets of speculative action like Digital World Acquisition Corp. (DWAC) , which is the Trump vehicle.
Investors seem to be distracted by the election and the drama over the Elon Musk takeover of Twitter (TWTR) , but they are feeling more optimistic, and that is helping the market action.
Have a good evening. I'll see you tomorrow.
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