For the past four sessions equities happily floated along in cruise control, fully in line with an anticipated positive close as suggested by the seasonal statistics for week #40 (see my Monday post). However as it is 2020 A.D., and per my rather prescient post on Wednesday, we should have been prepared for the proverbial spanner to once again be thrown into the flaming political train wreck already hurdling toward us.

For the record in my estimation the odds of President Donald J. Trump actually succumbing to COVID-19 are rather slim. I know he’s fairly old and yes, he’s also a bit overweight. But he’s the POTUS and as such will have access to the best medical care on the planet. Plus at this point it’s not even clear that he’s symptomatic.

Not that any of this matters of course as the sheer possibility of his demise is sheer manna from heaven for the clickbait hunters, and is guaranteed to provide ample fodder for mucho drama and controversy on both sides of the political spectrum. What this particular political straw will do to an already heavily compromised election season of course is anyone’s guess.

From a trading perspective I can guarantee you plenty of fireworks today as the /ES is already trading at 3308. Given a fair value of roughly -10 that puts us at about SPX 3320 plus minus at the open.

Interestingly once again – and I hate to sound like a broken record on this – expected move was once again observed almost to the handle on the upside. So suffice it to say that a lot of long hedgers who were sweating yesterday at the close may be breathing a wee bit easier this morning.

The VIX briefly kissed the 30 mark in early trading, based on the VX futures which are currently trading around 32. Definitely a harbinger of some fireworks to come today, given that weekly options are about to expire.

Suffice it to say it’s difficult to predict where we’ll end up by the end of today’s session.

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Instead let’s take a step back and look at a handful of price charts sans the indicators.

My monsters of tech composite index thus far seemed bound to breach at least one of its upcoming hurdles in the next few sessions to come. Most likely we’ll see a pull back here as well, and it’ll be a good buying opportunity once things start to slow down a bit. I don’t think I’ll be active here today however.

I haven’t talked about crude for a long time as there – well – really wasn’t much to talk about. However it’s now picking up steam, and frankly not in the direction most people had anticipated as fall/winter usually favors the bulls.

A breach through the previous spike low near CL 36 most likely draws us lower. As you can see there’s nothing but air below, and it would not be unusual to see a HV cycle to follow what to all intents and purposes has been a LV cycle since mid July.

This is not a bad time to get exposed as we’re in the mid of the roll-over cycle. But if you play here be advised that crude is a big contract and should not be touched unless you at minimum sit on a $250k account. Otherwise there’s always USO, UCO, or DBO. Be careful with UCO as it’s a 2x ETF. More info here.

Finally gold – it looked like it was about to slip off the plate but for some reason turned on a dime and has now climbed back into its old churn zone near GC 1950. I think another dip lower toward GC 1875 may be a good buying opportunity.

Of course it could continue back lower but in terms of a high probability setup this is probably as good as it gets for gold. The bearish scenario does not look too credible right now given the failure to take us down to 1800 and below.

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