Hey, everyone. Joshua Martinez here with tradersagency.com and welcome to this week’s idea. Today’s date is November 2nd, 2020.
Okay, so tomorrow is US presidential election and here’s the deal. I’m flat. I’m out. I’m not trading currently. I’m going to be waiting for the announcement to take place who the winner is tomorrow, and then ideally make the decision from there.
It’s going to be a relatively wild experience. That’s what I’m anticipating because this year’s a little bit different because the whole COVID scenario. And what I mean by that is you have what’s called mail-in votes or mail-in ballots.
So ultimately, if it’s too close to call tomorrow, it could be one of those scenarios where we don’t know who the winner is, and it could be when we have to wait two weeks or a week, or whatever the amount of number is for the mail-in ballots to come in.
And then after the mail-in ballots get counted, if it’s still too close to call, then you could get through the whole, this is fraud, it’s not fraud. So who knows what’s going to happen? We may not find out. We may find out tomorrow. We may find out two, three weeks, who knows, like who knows.
And so that uncertainty for me is making me a little bit nervous on wanting to trade right now. So what I’m doing is staying out of the market. I’ve been flat in my positions and I’m going to be waiting for the election to take place. Now I’m out on all markets, that’s stocks, that’s options, that’s futures. It’s all markets, I’m out.
So what am I looking at right now? Well, usually when there’s uncertainty, people they fled to gold. And so if this whole thing with the election takes place tomorrow and people are like, who’s the winner? Like what’s happening here. The people are going to be a little bit nervous putting their money in. They’re probably going to take their money out. Where are they going to put it?
A scenario would be gold, so I keep my eye on gold futures. We do have support on the daily timeframe. I’ve been monitoring this down channel where support held once, and support is now appearing to be holding again.
This low could be higher than this low, which will cause an extension. That’s a FIB extension. Price 0.1973.9 827 ticks away. With e-mini contract, that’s over $8,000. With a micro contract that’s over $800. The problem is margins are through the roof right now. We do not have intraday margin. Brokers have increased it basically saying it’s relatively expensive the trade right now. It’s going to cost a lot to invest or required a lot to invest.
What does all that basically means? It means everybody understands, we’ve got an election tomorrow and we’re expecting the market to move like crazy. It’s just stuff that you’ve never seen before.
One of the things that you may want to do is you may want to just turn on your charts. And just watch the election, the votes come in in real time. Which state, the swing states specifically. When a swing state is red or blue or confirm, watch how the markets react. It’s just like fireworks. They just move so fast. Not a time to enter into the trade in my opinion. I don’t like environments like that, but I do believe after all this is done and over with, we should have very smooth sailing.
So this week’s idea, get out of the market, keeping my eye on gold and seeing what the heck happens with the elections. See you next week. Joshua Martinez.
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