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Market Goes All-In for Clinton

Jim Giaquinto

NOTE: Have you heard that earnings growth is back? You may have missed this good news given all the election uncertainty and the sluggish market (until today). But it’s true. This earnings season broke five straight quarters of declines. Whenever Steve wants the Zacks Confidential to focus on earnings, he hands the baton over to Sheraz Mian. Read his very detailed scorecard of this season, and learn about the hottest spaces and a couple of his recommendations by clicking Q3 Earnings Scorecard.

We certainly know who the market thinks is going to win the presidential election tomorrow…or, at least, who they hope will win. In the last polls of this election cycle, Hillary Clinton holds a steady yet rather small advantage on Donald Trump. This would be a nail-biting scenario under normal circumstances, but is all the more nerve-racking when remembering the Brexit vote from this summer.

But the markets went ‘all-in’ on Monday for Clinton with more than 2% advances in each of the major indices. The S&P jumped 2.22% to 2131.5, the Dow advanced 2.08% to 18,259.6 and the NASDAQ surged 2.37% to 5166.2. So the editors were right that a Clinton victory would finally bust the market out of its range…the only problem is she hasn’t won yet!

In the portfolios, Game Changers is bucking the conventional wisdom a bit in expecting the market to decline regardless of who wins. So the editor added a couple of ETFs on Monday that should advance as the market declines. Momentum Trader added a semiconductor-related name that has jumped along with the market, but should have a lot further to go. Reitmeister Trading Alert used the recent “stealth correction” to add more shares of a portfolio position that was beaten up unnecessarily. And finally, the Black Box Trader swapped out four names in this week’s realignment, and also registered a double-digit winner. Read more below:

Big Return for Black Box

→ The Black Box Trader had a big winner in this week's adjustment. Chemours Co (CC) brought a 22.1% gain to the portfolio in a little less than a month! Take a look at all of the portfolio's moves below.

Today's Portfolio Highlights:

Game Changers expects a “sell the news-style event” in the wake of tomorrow’s election, regardless of who actually wins. Brian decided to add a couple of shorts to the portfolio to capitalize on such a selloff. The bigger of the two positions is in Short Biotech (BIS), a 2x leveraged ETF. This is basically a play on a Hillary Clinton victory, which would probably send biotech screaming lower based on her complaints of high-priced drugs. BIS should rise as the space falls. The other buy is 2x Short S&P 500 (SDS), and this is a more general play on the market heading lower after the election. Learn more about both of these moves in the full write up.

• Shares of Amkor Tech (AMKR) jumped today along with the rest of the market, but Dave believes that this semiconductor packaging company could be on its way to even higher highs…especially if this relief rally has legs. AMKR is a Zacks Rank #1 (Strong Buy) with a VGM Score of “A”, which puts it right in the sweet spot for Momentum Trader. The editor bought the stock on Monday with a 12.5% allocation to capture as much of the rise as possible. Read the complete commentary for more on this addition, including a look at its chart.

• The country is going ‘RV crazy’ these days, which is why Steve bought Thor Industries (THO) for Reitmeister Trading Alert last month. Shares of the company had fallen of late, but it had nothing to do with its fundamentals and everything to do with the stealth correction that the editor has been writing about. Therefore, THO presented a great buying opportunity, which Steve took advantage of by adding more shares today and increasing the position’s allocation to 8%. Learn more in the complete commentary.

• In addition to selling CC for a double-digit gain (see above), the Black Box Trader also got out of DTE, GD and PFG. It replaced these names by adding Amkor Tech (AMKR), LPL Financial (LPLA), Quanta Services (PWR) and TTM Tech (TTMI). Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.

• Most polls are indicating a Clinton victory. The betting sites are back to where they were before the recent drop for Clinton. And the market is now signifying a Clinton victory. It seems as if she is a lock, but the words “Brexit” keep popping in my head.

"There is a small chance Trump will pull it off, if so expect the markets to go crazy. We are positioned for a Clinton win and the S&P to continue higher into the end of the year. And 2240 as an eventual target for early 2017," said Jeremy in Zacks Counterstrike.

• "People seem to be of the belief that Hillary is going to win tomorrow, and many polls seem to back this up. However, I don’t think we can discount a Brexit-like situation from happening here, or at least a very close vote in a number of key states.

"So, what I am getting at is let’s see if there is going to be a series of recounts here, as unless it is extremely decisive, it seems like a recount or two is in the cards for this election. I can’t imagine the market liking that too much so we could be faced with a bit of a sell-off. Certainty is what the market is looking for, and if tomorrow is anything like what the rest of this election has been, it is hard to make a bet on that being the outcome with any confidence," said Eric in Surprise Trader.

All the Best,
Jim Giaquinto


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