One Day before election – Markets bouncing – Virt.Portfolio : Add DAX & US BIOTECH ETF (1)

Odds of a Trump presidency, which has scared investors in the last week,  retreats again today on FBI reaffirmation it will not take action against Hillary Clinton over new emails diclosure. This will likely have as an effect for the equity markets to interrupt a long losing streak of daily losses – 9 days for SP500 , not seen since 1980 – and initiate a strong bounce .

This bounce will (is taking) place from already discussed support levels : in the 10250-10400 area for the Dax , from 4650 (at which we closed puts holdings on friday ) for Nasdaq 100, and from 2080 for SP500 as shown on chart below. The said supports should hold at least for the short term if H.Clinton gets elected. 

SP500 Chart technical rationale for a bounce from friday’s closing ( Note that SP500 futures are already 25 points higher) :

  • Bottom of downtrend channel .
  • 200 days MA is support.
  • RSI @ oversold levels matching with entry points in the past (>75% of cases).
  • Streak of 9 down days.

Targets 2120 @ thereafter 2140 – 2150 range . Should 2150 be broken up on a daily closing basis, the US index will probably hit new highs and go beyond 2200.

On the downside (Trump elected) 2080 will be broken down and a minimum of 5% and up to 10% slide is expected so after Brexit levels would be revisited .

sp500-071116

Action :

Buy 1 unit in the ETF Dax Daily Long 2 X at limit 218,25 ( Current @ 219 EUR) – Leverage ETF .. 2 times the dax daily performance. – ISIN DE000A0X8994.

Buy 1 Unit of iShares Nasdaq Biotech ETF (IBB) at max price of 253,50 USD , Last closing at 251,70 USD.  ISIN US78464A8707-  

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