Well now what to do?
I believe my SOM on the US that I sent out recently is the right blueprint to follow for trading the markets in the aftermath of the election. In that piece I talked about the negative Impact of the growing income and wealth inequality, and ossification in new business creation on the US economy and asset markets. Yes Google and Amazon are great companies bjut the US is creating substantially fewer of the next version of these companies versus history. In my view these factors would lead to a slowing in the US economy, further weakness in corporate earnings, and for the Fed move over the next six months to move to an easing rather than a tightening bias. I pitched two trades: long S&P put vol and buying long dated calls on gold. I believe that these trades are even more compelling after the election. The key is not his views on Obama Care, trade policy, immigration policy, etc. Rather it is these policies are so different from the current policies. So can he implement his radicle policies and if so when? This will clearly increase policy uncertainty and that historically been a net negative for economic growth.
Also I released my SOM Brazil last night. If you think Mexico will have issues after the election Brazil will be even more at risk. My trade is to buy OTM puts on Bovespa. Why is Bovespa trading near its historical highs with the economy still in a recession and commodity prices still near there lows, including oil?
All of these pieces are on my web site that you can access at
I am starting a strategy firm call SOM Macro Strategies. This is a free trial, access to these pieces and me are available on a subscription bases. Give me a call at
And we can discuss.