If the S&P500 rallies during the three months prior to a presidential election, the incumbent party has won 12 out of 14 times this condition has occurred. similarly, in 7 of the 8 elections where the S&P500 fell over the three month period the incumbent party lost. The overall predictive record for the S&P500 is 86.4%.
We all know that correlation does not necessarily mean causation. However, the deep state is unlikely to take the risk of a market plunge over the next two months. Of course, this sets up a potential short trade on the near certainty that artificial and temporary support is occurring and will end around Nov. 8. We know about the massive buying of SPY calls, forcing delta hedging by the writers. And we hear daily from ZH how the S&P500 is rising while the macro of earnings is plunging as if a recession had already started. It looks like perfectly predictable oligarch driven political demand. On the surface it looks like the government is not directly involved.
The Fed can't just buy common stocks directly without incurring significant political risk, so then who is carrying the load for them? The answer is the Swiss National Bank which is buying many billions of U.S. stocks, offsetting most of the steady selling by retired boomers who must sell to maintain their life styles.
But then the real question is what sort of dollar based transactions has the Fed entered into which effectively lend the the Swiss National Bank the money to do this for Hillary?
I have two months in which to place my bets that the divergence between S&P500 and macro ends around Nov. 8 with the SPY heading lower, and will be placing that bet.