Pres Race Over / How About Rally ?

Presidential Race for 2016 is about as interesting as it gets but the bid underneath the market has already figured it out and clearly sees the Democrats winning and extending the pro Wall Street tilt. The plans are already being set for a Ryan vs Hillary in 2020 but Republicans may have trouble putting the blood back in the bottle.

The S&P 500 and Nasdaq made record highs this week. AAPL is beginning its run to test all time highs while GOOG's rally is a bull trap. Relative to the rest of the market, BAC and GS have room to run while MSFT is a bad bet. As CoverRisk claimed in its last BaseOp2 post of 2015 "IBM has cleared the worst of the riskvalue issues and has the best relative outlook. " The stock is up 19% so far this year, the best of CoverRisk's Q8.

Market Rally Prefers Clinton

July was marked by low volatility and evaluated equity prices. This buy stock/sell volatility trend has worked since the first quarter . Markets will be sensitive now to presidential election polling. Up for a Democratic gain, down for a Republican. The election itself will probably not be as close as some polls currently indicate. CoverRisk believes it will be a Democratic victory. If it is not however, equity markets will enter a downside testing phase with negative rates presenting new challenges for quantitative easing.