Which Way Wednesday – Elections and Markets too Close to Call

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Election Map4 Senate races remain undecided.  

The other 96 seats are split 48/48 among Democrats and Republicans and it does look like Republicans will take the House, at 199/172 so far with 218 seats needed for control.  Of course, the Democrats tend to do more mail-in ballots as the GOP has been spending years calling that system fraudulent – and that’s why they think the election is “stolen” as the predominantly mail-in Democratic votes get counted last.  

With 98% of the votes counted, Herschel Walker is only losing by 35,300 votes and that is simply horrifying.  Kelly (D) should win in Arizona and Wisconsin is too close to call but surprising if it turns blue.  Nevada is also too close to call and that’s going to decide the Senate but only 72% has been counted there and the Dems should benefit from later votes.

The Governors generally held their offices and, on the whole, the election was a big disappointment for the Republicans but they do have potential control of Congress and that means Biden will be impeached for “crimes” to be determined and the Government will once more be shut down and good luck passing any sort of bill for the next two years.  

So America leaves these midterms much as it entered: a fiercely divided country that remains anchored in a narrow range of the political spectrum, unhappy enough with President Biden to embrace divided government but unwilling to turn fully to the divisive, grievance-driven politics promoted by former President Trump.

House MapDespite the lead the Republicans have in the House at the moment (197/172), it is very possible that the Democrats will pick up 46 of the 66 undecided seats as many of them are in California and simply late to report and, as noted above – mail in ballots – which Republicans don’t trust.  Should the Dems keep the house and win the Senate – it will be a crushing defeat for the GOP – who spent the most money ever ($5Bn!) to win these races.  

I know I’m the only analyst saying this but I’m also the only analyst who knows how to do math and the Dems had a 220/212 advantage in the House with 3 open seats coming into the election and, so far, with 371 races declared, they have lost 3 seats.  That’s 1% and there are only 64 races left to call so, if they only lose 0.64 seats out of those – they win!  The GOP has to flip 3 more seats of the last 64 to gain control – a 500% better pace than they are on so far. 

The market is undecided this morning and, sadly, back below 3,840 on the S&P 500 but still holding 11,000 on the Nasdaq – so there’s still hope.  We really do need to be over 3,840 at Friday’s close or we should probably be adding some hedges into the weekend.  The SQQQ 2025 $60 ($27)/90 ($23) bull call spread at $4 is the best deal at the moment, offering $3,000 worth of protection for each $400 spent.

SPX Nov 9 2022

We will see which way the winds blow today but the energy sector is already taking a dive as mean old Biden may be around to call them out for raping the taxpayers for a little while longer. 

Even as we speak, the GOP just lost 2 of their 199 house calls (now back to undecided, but they are trending the wrong way for them) as those late ballots roll in.  

 

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10% of Vermont voted against banning slavery in the state constitution?

https://www.vermontpublic.org/local-news/vermonts-2022-midterm-election-results

Why would that even be up for a vote? It’s 2022 people!

Next they’ll come for our Big Salads.

I half remembered it being a lever for prisoners’ rights, to fight forced labor

Voters in five U.S. states where slavery or involuntary servitude remains legal as a punishment for people who are convicted of crimes will vote next month on whether to ban the practices outright.

If passed, the measures in Alabama, Louisiana, Oregon, Tennessee and Vermont could open a door for prisoners there to challenge forced prison labor, for which most are paid pennies per hour and in some cases not at all.

Good Morning.

Any thoughts on Disney? Is this an overreaction? I have a 110/125 2024 spread

Thanks as always

Good morning everyone. Here is the link to today’s webinar
https://attendee.gotowebinar.com/register/5179959134648124944

“With 98% of the votes counted, Herschel Walker is only losing by 35,300 votes and that is simply horrifying. “

The Heisman trophy winner is hardly the ideal choice, but never forget Warnock ran over his wife and steals from the collection plate. So kind of a tough choice.

The ex is still alive and there’s no proof of pilferage…move along… 🙂

I’m referring to the Red Wave as the Red Leaking Bladder. Apologies to anybody who has incontinence issues, but man am I happy that MAGA doesn’t appear to be performing nearly as well as expected.

Is this sarcasm or are you serious ? If it’s sarcasm, please mark it as such.

You don’t know Warnock’s background obviously.

I’m surprised at the love of the leftist candidates. Thought this site was about capitalism.

It’s a valid question since your first statement was wrong and I’ve never seen you post here before. There has been attempts to “humor” through sarcasm before on this site but it never really works out that well except when Phil does it because we all know him.

A quick fact check pointed to your first statement of Warnock running over his wite (which should have said running over wife’s foot) being wrong. Couldn’t find fact checks for your 2nd statement so the question is “Are you writing this as what you think are facts or are you just trying to be funny”. I don’t care if you are leaning left or right. I just don’t want to see BS presented as facts.

And now I don’t want to talk about this anymore.

well said

not well said. Phil loves a little sarcasm. Phil likes irony. Even if he didn’t, fkeithl has every right to express himself here. You should be happy he challenged you to explain how capitalism dovetails with your particular political choices. And to characterize what he wrote as presenting that Warnock ran over his wife as a ‘fact’, is ridiculous. It was obvious, not veiled, sarcasm. What’s an options investor? He or she isn’t left or right; we perch in abject fear on the fence, in the center, grasping at facts, hoping for conviction, waiting to jump at the opportune moment. Besides, you want to change fkeithl’s mind about politics, so you have to communicate with, not denigrate him.

happy
choices
obvious
change
denigrate
??? – did I miss something?…

nobody should infer that i agree with fkeithl’s political outlook; i just strongly believe he should be able to speak his mind here.

Counterpoint: He’s spreading unfounded statements. Post a link to the “truth” coming from AP, Reuters, or another legitimate news source and I’ll read it. Otherwise, it’s just baseless rambling.

you could gracefully post that link. phrases like ‘baseless rambling’ needlessly antagonizes fkeithl. or maybe feithl prefers a no-holds-barred politcal brawl filled with personal invective. i’m suddenly uncertain what we’re shooting for here. i’m definitely certain fkeithl is not uplifted.

Phil / AAPL
A reminder on looking at a new trade on AAPL

hi phil can you check oil report if you have time. thanks

AXON one of our old stocks up on earnings. I have 100 shares. We thought someone should have been tasered rather than shot. Now its all about recording the incident.

That used to be TASR, right? I made bundle on it back in the day, on a Phil play. Fun!

Thanks Phil for the detailed response.

Stockbern, I am with you on AXON, Cost basis $6 a share ( not including all the premium received over the years). Guess I’m not great at selling and moving to fresh horses. I enjoy selling calls though. Received nearly $40 today for the 12/2023 $ 175 calls.

I forgot…dialing in….

nope.. waiting to view your screen..no sound.

Waiting to see your screen.

Phil// Has the trade of the year announced for 2023 yet? I want to make sure I didn’t miss it. Thanks.

Phil, thoughts on going long /KC? Seems to have fallen a long way…thx

Hi Phil,
I’m still catching up on October review  😜  You wrote this about LOVE:

“LOVE – Oh nooooooooooooooooo!!! I forgot we had two of these. Let’s roll our 40 April $20 calls ($30,000) to 30 more (45 total) of the Dec 2023 $20 calls for $9 ($27,000) and sell 20 more (30 total) of the Dec 2023 $30 calls for $5 ($10,000) for net $17,000. That takes $13,000 off the table and we’ve got the short calls well-covered.”
 
Is that a typo that should read 70 total instead of 45? Is it still good to do that or would you recommend a different roll?

They’re in the Earnings Portfolio

Phil,
It would appear we will be in limbo until the election – and control of Congress is decided (at least December). The mood seems to be that the market wants Repub control even though history suggests it does better with Dems. Is the lower volume drift down today, suggesting that Dems might be in control or fearful thereof? Backstopping this is the statistical tendency – as you related – for post-midterm election years to be bullish – which would be contrary of the move today. Would like your thoughts.
Thanks