Prior to the election my indicators suggested buyers were going away, thus causing markets to fall. It’s important to note that selling did not pick-up, suggesting the people were hedging their bets till after the election. Now that the election is over my indicators suggest buying and selling on the NASDAQ has returned to normal. The other indexes may follow suit this week. Barring news about Covid-19, I would expect the markets to continue their volatile rise upward.
Now that the election is over I’m surprised at the number of people who were surprised by how close it was. Last year Moody’s Analytics produced a report predicting a Trump victory if economic trends continued and there was low voter turnout. If the economy declined and there was high voter turn out then, according to the report, Trump would lose. From the report is was clear that the key battle ground states would be the rust belt states of Michigan, Wisconsin and Pennsylvania. This is exactly what we saw. Further the IBD/TIPP poll, which accurately predicted the past 8 presidential elections, suggested the popular vote result would be 50% Biden and 46% Trump. This too is almost exactly what happened; a close election, but it is not a “Blue Wave”.
Since we live in a political-economy it will be interesting to see what aspects of Trump-ism the Biden administration maintains and how the markets respond to Bidenomic.
Quant For The Masses 