We have the gameplan and you can see it as clear as the water is blue. If you look at what worked in November of 2016 when Trump got elected there is a very specific theme, one that has been picked up by professional money managers now, in attempting to price in a Trump win.
I am sure my colleagues will be angered at me for allowing the Third Estate in on our gambits, but I am a kind and generous person and you deserve money too.
NOTABLE SECTOR WINS IN NOV 2016:
$XLF +14%
$KRE +20%
$XME +22%
$IWM +11%
$UUP +3.3%
Let it be noted, the theme for a Trump victory in 2016 was domestic focus (i.e., small caps $IWM) and a strong dollar and soaring bank stocks and materials. Stocks like $CLF jimmied higher by 60%. There was a palpable disdain for tech and globalist companies, which is why the $QQQ traded FLAT for the month. In other words, there was an 1100bps spread between the two indexes and you can see that manifesting itself now.
Today was a terrible day and I’m afraid there might be a little more selling before we bounce. But we are also pricing in a totally different political reality, one that does not favor BIG TECH and one that might be more conducive with American industrial projects, defense, and demand for oil and materials.
I closed the day down 147bps, now hedged with a 22% weighted $SQQQ position.
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