Friday’s out-of-the-blue FBI revelation of (essentially reopening) what is considered to be an ongoing investigation of impropriety shook not just the S&P, but importantly, the Russell, sufficiently to venture into a crucial last-ditch technical support zone I’ve alluded to these past two weeks (and that’s the Dec. S&P 2110-20 zone; above the lateral 2100 line you can easily visualize beneath both the September and October lows). 
 

I’m trying to say just the least I can about this; as we try to keep politics out of analysis, other than when it matters. It’s long been clear markets care how this election goes; perhaps for wrong presumed Wall Street reasons. The idea that a Clinton victory is welcomed since it suggests a continuation of domestic and international (read: globalist, perhaps monetarist) policies, which provide comfort to multinationals and many large institutions (or foreign sovereigns) that the boat ‘won’t be rocked very hard’ (if at all). But I actually suspect even Hillary is more centrist on trade than President Obama; however that’s not how markets see it, yet. At the moment we’re dealing with perceptions about Hillary; more than how she would actually tilt in governance.   

Technically, the S&P was held up by Oil stocks (now crumbling a bit as it’s reported, though little noted, that Iran & Iraq may not concur on cuts in production at the formal OPEC meeting next month; after a two-day lower level one concluded Friday). I’ve warned all week, that though I’d predicted the recovery from the lower 40’s into the 50’s, that it wouldn’t likely hold, because it was trading-based stories and hints already from Iraq that they should have an exemption. Now you see a series of threats to ‘not’ cut production levels, accusations of allocation cheating (they’ve done that for years), and basically that had more to do with all the market moves, while financial media focused excessively on more mundane politics, than noting the ‘global bond rout’ underway for days.

The December S&P, which we hold short since (about) 3 weeks ago at the 2167 level, as a guideline, with some profits taken on the first break and then suggestions to traders to use recent rallies (especially into the Expiration week preceding) to ramp-up bearish exposure (or cut back equities holdings if an investor or money manager) was in a range.