Will the market crash if Dems sweep?

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  • Fri, Oct 30, 2020 - 04:58am



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    Will the market crash if Dems sweep?

I’ve been selling into the rallies. I’m not a chart guy. Not an astute investor, But I try to align with my gut. I see nothing positive for the economy in the event of a Democratic victory. And right now my gut says Biden 53% Trump 47% …….I hope that Chris and Adam weigh in, as this could be the inflection point that has been talked about on the site for many years.

  • Fri, Oct 30, 2020 - 06:11am



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    It’s a difference of mechanism and timing, not direction

I think it crashes either way. Perhaps faster with the Democrats, but – contrariwise – if they throw more money more freely and more to Main Street, it could remain propped up longer than if a Trump Admin put in less more slowly, and more dominantly to the corporations under the pretense we still have a functioning market mechanism that can trickle prosperity down.

But, hey, it’s just about the mechanism and timing. Not about direction.


  • Fri, Oct 30, 2020 - 06:35am



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    Will the market crash if Dems sweep?

Hey OOG,

During the stock market plunge on Wednesday, I actually took profits on 90% of my VIX call options (they make money when fear rises) and went long some of the more beaten down sectors in the market like energy and the miners.

I have decided to fade this election drama, expecting it to be a non-event in the markets.

FWIW, to me, a Team Blue Sweep couldn’t be more bullish for the markets. The market knows what the dems would do. The uncertainty in the market is from Trump’s side of the political equation (if he wins). That hasn’t been discounted by the market yet, in my opinion.

I think you should be buying the dips, not fading the rallies, because if you FOMO in after the election you will have destroyed your own trading psychology.

  • Fri, Oct 30, 2020 - 12:37pm



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    Reply To: Will the market crash if Dems sweep?

 And right now my gut says Biden 53% Trump 47%

Wow. I’m fairly uncaring, but based on the pols and adjusting for the media bias (like 2016) it seems the market/PTB assume Trump will win with even a greater margin that last time. I tend to agree. Of course, this assumes a fairly honest count, which may be a wildcard in the era of Deep State.

I added 20% to my NW on the “Trump Bump” in ’16 but unfortunately everyone seems forewarned this time. I confess I did bite my nails stocking up in 2016. Now it’s just boring.

  • Fri, Oct 30, 2020 - 12:48pm



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    Will the market crash if Dems sweep?

Hey JAG,

A resounding…clear cut victory for either side would be positive maybe….. but oil stocks might tank with a Dem victory. Also….a drawn out election tabulation with “peaceful protests” burning down cities would create uncertainty. Markets don’t like uncertainty.

Also I’m an old man….I need to keep what I have more than I need to find a 5% return right now.

I dumped my Clorox stock this week cause the pandemic will start to end on November 10th. Also sold 1/2 my AAPL and half my Newmont.

Lots of dry powder.

  • Sat, Oct 31, 2020 - 09:22pm



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    cap gains tax increase => anticipatory market crash

Posted this on my weekly report – cross posting here.

Jim Rickards interview from 3 weeks ago.  I fast-forwarded you to the part where he talks about Biden’s tax increase for cap gains.


Biden’s cap gains tax increase (to 39%) would effectively make it a Very Good Idea ™ to sell anything you had long term gains on prior to the effective date of the tax increase.

That would be prior to Jan 1, 2020.

Assuming he wins, of course.

Most likely, this would lead directly to an equity market crash, as anyone with long term cap gains bails out in advance.  And of course Wall Street will front-run these people too.

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