The US election outcome more than likely will create more uncertainty for equities, bond markets and global trade going forward . We definitely enter a risk-off and volatile period. Not all sectors are equally positionned to potentially benefit from measures announced by Donald Trump in his program . Pharma, Defense, Steel , Construction, infrastructure in general are amongst the sectors that should perform better RELATIVELY SPEAKING ( I insist on last 2 words !!).
Indices support levels on a closing basis :
- SP500 : 2080 – See Nov.7th post.
- DAX : 10250 – See Nov.3rd post.
- Nasdaq 100 : 4650 – See Nov.3rd post.
Virt. Portfolio Action :
- The ETF Dax Daily Long 2 X has been bought at EUR 218,75 Limit yesterday PM.
- iShares Nasdaq Biotech ETF (IBB) : New limit at 257 Eur was missed by a little – Session Low 258,27 / Session High 265. The healthcare sector as a whole is welcoming the Clinton non-election : Preopening is at 277,25 (+6%). We are not going to chase the stock at such level but given the expected volatility to come we nevertheless adapt the limit to 265,50 . Why 265,50? The reason is that a gap will form at today’s opening compared to yesterday sclosing at 265 . Gaps are filled in around 80% of cases.
- In order to protect the portfolio against uncertainty and risk-off period to come we add traditional safe haven vehicles which are GOLD and SILVER :
- 1/ We buy the second half of Gold position @ current price (13:15 CET) of 1302,25.
- 2/ We buy 1 Unit in SLV the Silver Tracker quoted in NY. Limit at 18,05 USD. The trend is up and, 200 days MA is support, 50 Days MA reversing up.
XLV – Health care sector tracker – Buy 1 Unit at yesterday’s closing price of 68,40. This is a very low limit considering the preopening price which is currently at 70,50. We will try here to benefit from market volatility to enter this unloved sector year to date – see rationale above and in the last post.