Commenting on a possible rally on Election Day and today’s trading, Gorilla Trades strategist Ken Berman said:
Bulls Desire A Rally On Election Day
The major indices are all sporting hefty gains at midday and bulls are looking to extend yesterday's rally on Election Day. While the latest polls and prediction markets point to a tight race between President Trump and Joe Biden, increasing the risk of a contested election, risk assets surged higher across the globe overnight, and even more buyers stepped in following the U.S. open. The major indices are back near their 50-day moving averages, which could remain in focus in the aftermath of today's vote.
In economic news, factory orders came in slightly above the consensus estimate, with a reading of 1.1% continuing the string of positive surprises from the manufacturing sector. All eyes will likely be on the battleground states of Florida, Pennsylvania, North Carolina, Arizona, Wisconsin, and Michigan this evening, which could determine the fate of the election. That said, due to the extraordinary circumstances, this Election Night could be even more tumultuous than in 2016, so keep your seat belts fastened and prepare for a volatile overnight session in financial markets.
Dow: 27,589, + 664 or 2.5%
S&P 500: 3,388 + 77 or 2.8%
Nasdaq: 11,191, + 233 or 2.1%
Russell 2000: 1,601, + 32 or 2.1%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 9-to-1 ratio on the NYSE at midday. Only 11 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 60 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. The key sectors are all trading in the green at midday, but financials, industrials, and tech stocks have been clearly stronger than the broader market this morning, with real estate stocks showing notable weakness due to the rising Treasury yields, but the broad-based rally is a huge plus for bulls in the face of the considerable uncertainty. Stay tuned!