8.11 - midterm elections uplifted the market

Will mid-term elections change trading?

Tuesday, along with yesterday were two tough days. The shakes and changes in the world scene were only due to the American mid-term elections the results of which were still coming in from the United States last night. And while it is extremely hard for the non-Americans to make sense of what party won which seats and how much of an actual political power goes where from now on. But fortunately we are not here to talk about the political power of Republicans and Democrats. We are here to talk about markets and their reaction towards the results as well as they further behavior.

As you all know there has been a massive selloff. And that is a fact that that selloff is still echoing today as we are constantly making references to it. And that is also not a secret that not only Asian stocks were injured in the fall. Like everything that falls from a great height there were trading buddies that were taken by Chinese stocks down with them. And American tech stocks were also the subjects for that down-movement.

With so many changes you probably do not remember that, but that is exactly why we are here. There was a day when right after Tesla’s stock recovered after Mush was removed from the CEO position and we thought that the company has seen its darkest days already, the stock fell by almost 15 percent. Same thing happened with Apple and we attributed it to the fall to the poor iPhone sales, but in reality all of the changes were just a part of the world-wide phenomenon at the time.

Well now we see a totally different performance. We night not understand American electoral system, but we surely understand that the pressure from it spoils stock trading for everyone around the world. Now we see the surge in Amazon and Netflix. Google and Alphabet are also rising. Apple, Facebook, Twitter, Tesla – these are the pillars of the American tech stocks. And they all are surging at the moment. It is also entirely possible that this growth can kick-start a new phase of the bullish markets.

What stocks are going to surge further and which are going to fall. Well, that depends.

Take Facebook. We have seen a lot of bad stuff happening to Facebook lately. And right now it’s crossroads for the company. In the last weeks prior to the elections we have seen a lot of pressure on the company following Russian trolls-scandal. It was anticipated that the Russians would meddle into the elections again. And traders awaiting a scandal pf the sorts were awaiting the crash of the shares, thus staying away from it. And we saw the consequence of that every day of the week with only about 10 percent of the last few weeks spent in the green zone by the stock.

And now, with elections behind us and Facebook being seemingly not involved in any of the controversy it is entirely possible that we are finally going to the surge of the rice. But. If the evidence are going to start flooding the news of Facebook’s involvement in the elections we are going to see the downfall.

It is easier for Apple. Although there are still uncertainties with Apple producing their phones in tariffed China, son Christmas sales are going to hit the stores. That it were we are really going to see the demand for the new Apple produce. And something tells us that this year is going to be better that the last one for Apple’s stock as we see the real improvement in company’s policies regarding the production lines and demand-supply numbers.

Again we have to come back to the connection between politics and trading and economy. As we know all of the three previously separated worlds are now practically one. With political differences setting us further and further apart it is harder to keep track of everything. And the harder it is to keep track of everything, the harder it is to see the whole picture, which is crucial for traders. Especially now, with so much happening.

The harder it is for us to see the whole picture, the harder it is to make an informed decision. So, stay focused, stay in tune and be aware of as much as it is humanly possible – those are the rules for trading now.

 

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