Trading Room – Thur 8 Nov 2018
The U.S. mid-term elections results are in. And the world markets are watching closely. The Democrats have won control of the House of Representatives in the U.S., granting them a check of President Trump’s power and policy. The Republicans, meanwhile, have kept the Senate.
It was reported that both sides in the US have claimed the result as a victory with President Trump tweeting about the “tremendous success tonight.” But he will also know that the result will allow Democrats, who could control the House for the first time since 2010, to thwart or frustrate his more controversial social and economic policies.
At its worst, media reports say that a Democratic majority in the House will grant Democrats investigative powers and they could even move to impeach the president, although it’s not seen as a likely outcome for now.
Could the big winner be the US stock market overall as a hamstrung government leaves in place much of what President Donald Trump has accomplished, but also keeps in check on some of his more extreme actions like trade battles?
Some US strategists however say that while the midterm elections will create significant changes for how President Donald Trump can accomplish his domestic goals, the results may not mean much for the country’s trade policies.
Both Democrats and Republicans in the US are believed to support a tougher stance on Chinese trade and intellectual property practices. As a result, the president may enjoy bipartisan support as he pushes for Beijing to reduce the bilateral deficit.
However, if Trump were to re-introduce tariffs on allies such as the European Union or withdraw his country from the World Trade Organization, Democrats could conceivably intervene according to analysts.
How will the US and world markets react to the results and is it a catalyst or mirage? US stocks rallied strongly yesterday although the election results were expected in line with most polls before the elections.
Worries about the pace of interest rate hikes, the trade war and oil prices from Iran sanctions may still weigh on the US and global markets including on Bursa Malaysia but has the gloom been lifted by more check and balance in the US from the results?
How should you as an elite trader trade the results for the short term and long term?
Will the US or global markets make key recoveries or will weakness continue to persist in these markets? Will Bursa Malaysia go on its own direction and rally up or down?
The KLCI will easily tip its hand by passing through key critical levels and accompanied by support from several key indicators. In fact, a look at the individual outlook of each of the 30 component stocks of the KLCI, which are tracked closely by our Master Algorithm in various time frames, have already given us a clear indication of where the KLCI is poised to move to.
The global markets in US, Europe and Asia are also moving in unison towards identical patterns and traders should act on these indications and formulate a trading plan in response.
Watch the key levels for the major global markets and the KLCI identified by the algorithm in the mPower Algorithm report for the tipping point and be prepared to trade early and in advance for your portfolio.
It may be a trading edge the market and other elite traders however does not want you to have.
Prospects for key global markets after US mid-term elections results on 7 Nov 2018