Sunday, November 6, 2016

Just before the election: Why the Market Will Soar on Monday

If you're betting that Hillary Clinton will win as expected, put some capital into inverse VIX products (XIV and SVXY).  During the first week November, the VIX soared to over 20 to close at 22.51.  If Clinton wins, the VIX will probably come crashing down.

Why the market will soar on Monday, November 7th, 2016
No charges after new FBI review of Hillary Clinton emails

Impact of Uncertainty Is Likely to Ease After Election Day (WSJ)

XIV closed at 33.28 on Friday, 11/4, but it's likely that with inevitable VIX decay (and a Clinton win) that it will go above $40 before the next significant VIX spike that pummels the price of XIV.

However, if you're betting against the grain that Donald Trump will win, you could short some of the indexes by purchasing SQQQ, SDOW, .  To protect yourself against significant loses, you may want to put some funds into the inverse of the shorts and also inverse VIX instruments.

3 month XIV chart (inverse VIX) leading to November 7th (Monday).


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