Simply put, the political quagmire unleashed by the passing of Ruth Bader Ginsburg leaves the market in an even more precarious position since if a contested election was a source of great uncertainty before, a 4-4 SCOTUS extends that uncertainty even further as we already know there will be no concessions for weeks, and the extensions of mail-in ballots will merely add fuel to the fire of what is shaping up as the most contested election in US history.
With the upcoming US election transparency already seriously deformed by the gargantuan levels of Democrat-promoted mail-in voting, the passing of Ruth Bader Ginsburg has thrown a nuclear spanner in the works.
If the US goes to an election with a deadlocked Supreme Court, amidst the almost unavoidable refusal to accept defeat by the Democrats (in the face of a highly likely Trump landslide), the US will quickly find itself in a maelstrom of discontent that will make the current ANTIFA-run cities of Portland et al, look like school-yard stuff.
Trump and his rapidly growing supporter base should be concerned, because the ructions have already started, with Republican Alaska Sen. Lisa Murkowski already firing the proverbial first shot, confirming she would not vote to replace a Supreme Court justice until after the inauguration.
Barrons reports, “Keith Lerner, chief market strategist for SunTrust Advisory Services, says the Court vacancy doesn’t change the market’s underlying narratives. The forces that have fueled the rally and lately caused stocks to wobble—including Fed policy and the impact of Big Tech on the S&P 500—remain intact. But Lerner also sees more potential for volatility to persist after election day.
Historically, the VIX volatility index has increased in every October of a presidential election year since 1992 and then receded after election day. If the results are contested after Nov. 3, volatility could stay elevated.
“This adds more fuel to a very high pressure, high-emotion election, but it’s not a game changer by itself for market impact,” he says.”
Rest assured, the Democrats will be utilising this opportunity to do everything in their power to destabilise the President ahead of the November election.
With markets already at a critical turning point due to continued debate on continued stimulus and extremely volatile global geopolitics, the weeks ahead will be extremely important for markets.
The technicals for the broader SP500 index are not looking good. After a massive run up after COVID-lows, which saw an almost 50% increase, there has been a number of factors suggesting that further upside is limited, at best.
The chart above shows the SP500 having broken a critical Icarus Reversals band, while at the same time having opened (as of the start to the new trading week) BELOW the critical Icarus Support Level of 3332.
The added confluence of the Icarus Oscillator rolling over into decline, and accelerating, as shown by the blue-control line dots, further strengthens the case for continued weakness.
The passing of RBG, compounded by Republicans already flailing at a critical time suggests, at best, increased volatility is on its way.
Chart of the Day
President Trump on the death of Justice Ruth Bader Ginsburg: “She was an amazing woman”