A Smoke-Filled Room to Talk Political Plays

Although politics can, more often than not, largely serve as a distraction to traders and markets, the reality is that we do have a visible General Election on Tuesday. 

Regardless of where you fall on the political spectrum, if at all, it is useful to have a few general ideas in mind depending on which outcome prevails. 

Solar has been, typically, a major issue for Democrats. They would like to see solar play an even more prominent role in alternative energy use. But the market has not been so kind, as the solar stocks by and large have been glaringly weak for a good while now.

In fact, purely due to technicals and not due political bias, solar has probably been the most consistently hands-off sector for Market Chess Subscription Services on the long side for a few quarters now. That said, we were recently entertaining the notion of a possible major bottom for First Solar, below, on the daily chart, 

FSLR is a domestic solar firm and often seen as one of the safe solars amid a slew of rather risky ones. But with earnings throwing a wrench in then possible bottoming pattern, that setup is not essentially broken and needs a good reset. 

Can FSLR rally sharply with a Clinton victory? Absolutely. But I suspect the overall chart structure still needs a bit more time and strength now to improve, beyond a one-off political rally. 

On the other side, Trump is talking up the coal industry. The KOL ETF has rallied well this year, with TCK a top holding and an undisputed monster in the market. The second daily chart shows SXC, an Illinois coal play.

SXC is currently bull-flagging and threatening to cement a long-term bottom. I would be more inclined to look here long with a Trump victory on Tuesday. 

But as always I will default to the technicals regardless of which candidate prevails.