November 4, 2024

Markets:

Stock futures nudged higher on Monday as investors braced for the pivotal U.S. presidential election. S&P 500 futures gained 0.2%, while Nasdaq-100 futures inched up 0.1%, and Dow Jones Industrial Average futures remained steady.

Nvidia shares rose 2% in premarket trading after the announcement from S&P Dow Jones Indices that it will replace Intel in the Dow 30. This change, effective at week’s end, highlights Nvidia’s strong performance as Intel struggles in the AI space.

The election outcome on Tuesday could heavily influence the market’s year-end performance. According to a recent NBC News poll, the race between former President Donald Trump and Vice President Kamala Harris is neck-and-neck. Market reaction, however, may depend even more on the balance of power in Congress. A split control of the House and Senate could maintain the status quo, while a sweep by either party could bring significant policy shifts like new spending plans or tax changes.

In addition to the election, Wall Street awaits the Federal Reserve’s latest rate decision, with traders anticipating a 96% chance of a rate cut following September’s 50 basis point hike, as indicated by CME Group’s FedWatch tool.

Earnings season is in full swing, with around 20% of S&P 500 companies reporting this week. So far, 70% of companies have beaten estimates, according to FactSet. Notable reports expected include Super Micro Computer, Moderna, CVS Health, Qualcomm, and Wynn Resorts.

 

Portfolio:

The main event is here—Election 2024! The results will set the stage for months to come, providing a runway for trading not seen in years. We’re entering the week with setups in SOXL and TSLL.  We've had a great past few months and refuse to give it back by overtrading here.  Staying patient until after the elections.

With both the election and the Fed’s rate decision to come this week, market volatility is likely to increase. Rising bond yields are adding pressure, creating a potential for “whipsaw” moves as election results and polling updates roll in. This environment is primed for sharp reversals, requiring traders to monitor key support levels. If these levels hold, they signal resilience; if they break, deeper downside moves may follow. Post-election clarity will bring more decisive market direction.

As we’ve been saying, the election’s conclusion will remove a major headline risk, paving the way for high-impact reversal points across sectors. This is a once-every-four-years opportunity for strong returns, amplified by a new tech cycle that few are fully appreciating. We see incredible potential for the year ahead, especially if the election brings a clear winner to alleviate market uncertainty.

Several impactful earnings reports are also on the docket this week, including PLTR, QCOM, MCHP, ABNB, ARM, AFRM, PINS, and FLR.

We're beyond excited about what’s ahead! A reminder: stay patient over the next two sessions. With likely thin liquidity around the election, expect quick moves to test support and resistance, potentially with false breakouts. Stick to high-confidence setups, and avoid rushing into trades. Clarity will come after the election results. Be ready! Let’s make it a great week, and for those in the U.S.—don’t forget to vote!