I am curious how others here are planning to trade the "election trade" ?
A few questions come to mind:
WHEN is the actual election trade? Now? The day before the election? The day after the election ?
HOW will the market move into the election? Rally up to a new all time high INTO the day before the election? Or sell hard down into the day before the election ? (in 2016 we sold down into the day BEFORE the election and formed an inverted hammer candlestick)
I count 26 trading days (price bars) that lead up to the day before the election.
My own take at the moment is that we could see price action pivot back up to the old all time high and then near the day before the election make a breakout to a new all time high (on anticipation of a POTUS win). But then if POTUS does not win, a one day crash of maybe 20 to 40%.
Why? I am borrowing from the play book of the IAR Argentina Index