Who Wants To Be Long Stocks Heading Into the Election?

Here are my reasons for a somewhat bullish stance this morning.

First, the chances of an uncontested Biden win appear to be improving. Biden widened his lead in The final PoliticalIQ Florida poll from two points to four. A Biden win means the likelihood of a rally in anticipation of a large stimulus package.

Second, therapeutics and vaccines for the treatment of COVID are closer than ever. A rational science-based approach to dealing with the pandemic may be closer as well. While the latest numbers point towards a tough winter, there is the potential for good news on the COVID front.

Third, the negativity among traders in the “Twittersphere” is palpable. Why not ride out the election in cash or net short the market? (because you might miss a nice relief rally and get sucked in 5% higher?)

To be sure, I see this as being an appropriate stance for the next few weeks. I come in this morning with my QQQ calls purchased on Friday. I will be looking to rebuild my index short position (now under 1%) on market strength.