A contentious Election - is not built-into the S&P's behavior, which rose on Monday for two reasons, which are not significantly going to shift expectations beyond those associated with the very near-term. Millions likely feel like deer in the headlights, whichever way this goes. So we'll reflect in real time a bit if we can tomorrow, knowing early reports from North Carolina, Florida, Georgia or a couple others will give a good indication, even if-or-as Pennsylvania will be contested for days. It won't matter if the outcome is clear in those states, at least that's the opinion of leading pollsters and makes some sense.

One issue is the idea that President Trump's narrowing of trailing poll margins is a new indication of his prospects this week. The other is a far more likely as well as technical aspect if you put-on political binders for a moment: technical work is pretty straight-forward. A successful (so far) secondary prior-low test.

The Friday S&P rebound (continuing Monday), was essential, because if the S&P advances beyond this slightly lower area (or consolidates to then rise), it marks a test of the September low (SPX). And of course if it subsequently breaks, a sort of affirmation of continuing overall downward intermediate action ensues, not to mention the risk of social discord in the streets, or worse.

However be cautious: just because a market breaks down (if that happens) it doesn't mean the Bears win with a dramatic TKO (my fighting term for what is a 'Technical Knockout'). A TKO might interesting find the Bulls bouncing off the ropes pretty quickly, so let's keep an open mind and not 'call' the fight.

Certainly the market's not boring, but simply 'holding its breadth' above S&P's lows of the last two months, ahead of results, and able to respond either way. Regardless, as I've repeatedly outlined, the 'timeline' and benefiting sectors, will vary dependent on the outcome. But late 2020 drama notwithstanding (a slew of tax aspects likely at the core of how big-cap investors respond), 2021 will see upward market behavior, especially given so many smaller-cap stocks are still relatively suppressed, hence have upward potential, while clearly the performance of super-caps in the next few weeks depends on much more.

Note that the bounce in the U.S. followed a bounce in Europe, amidst perhaps a belief that a Biden victory would restore better relations (including trade) or more, in the year ahead. Monday's chop by the VIX remains at elevated levels and reflects what I see as a lot of tension-on-the-tape not reflected by a basic look at the Indexes or stocks (VIX).

I am sufficiently optimistic about next year, albeit not the week, but will say, 'if' we get a 'concession' by either candidate late tomorrow (highly unlikely but 'if') I'd look for relief and a higher market and lower VIX, at least temporarily. If not well you know the implications of the bigger-picture (shy of 'megaphone') S&P possibilities. And if any voting result triggers massive social instability, then it's the adversaries of our Republic that will consider that an achievement.

Executive Summary:

• The market is not boring, but totally 'holding its breadth' ahead of results.

• Control of the Senate may be more significant than the White House, at least from the market's perspective, as relates to 'fiscal expansion.

• Both sides are in-favor of infrastructure, but variances as to whether we need 'stimulus' in the interim (we do as past the time to have vaccines or therapeutics arrive to avert serious economic challenges this Winter).

• A divided Government outcome is sometimes seen as desirable, but we have to reach economic 'escape velocity', which some believe has better odds with the President regaining the White House for these next 4 years.

• On the other hand, we have different configurations in both cases, so that is a reason for the market (and everyone to maintain concern but might as well be a bit 'chill' for the next couple days while most gets sorted-out.

• And that is a concern, will everything or everyone stay chill, boarding-up of businesses in many cities (especially New York) reflects precautions to a degree given recent memories of out-of-control mayhem, which went a good bit beyond protests (though most looters and vandals weren't mere protestors), nobody knows for sure how this will play-out in days ahead.

• The collapse of rents and property prices (typically by around 40% so far) in New York and San Francisco are good examples of the exodus or for now at least trepidation's related to what societal mood will follow.

• Last week's statement by President Macron that France is 'under attack', resonated twice in Nice and Lyon (after the Paris teacher's murder), and now you have a mass terrorist attack on a synagogue and 6 locations in Vienna, which should negate criticism of Macron's characterization.

• 'If' Islamists (ISIS or others) are taking advantage of COVID or Lockdowns to launch attacks in Europe, perhaps Europe's largest export should start to be any non-assimilating migrant requesting asylum (becoming more or less parasites on the system of a free country).

• Europeans will take note as Austria & Hungary were not very hospitable, do not have colonial history in the Middle East or North Africa (as France, England and Italy essentially did), and like Germany, learn to restrict such migrations (sadly it's difficult for Syrian refugees in Greece and Turkey but how to vet them as not hostile is an incredible challenge).

• I mention this as a reminder that when COVID is history, enemies of love and compassion (who attack those who feed them) will still be around.

• Speaking of, does anyone remember the platform of either Party here in the U.S. as we wrap-up the Election? I suspect most are voting on issues other than the platforms, though the word 'taxes' keeps surfacing.

• The 'emoji' at the top casts eyes on the lines at polling places Tuesday, in this pandemic, we wouldn't be surprised if they're relatively short, as hard to imagine anyone that hasn't voted before now, do you know anyone?

Changing economic outlooks will require monetary, fiscal or other issues, of course beyond what the market worries about more recently, lockdowns on a nearly-global basis, others (like Dr. Gottlieb) finally agreeing with my view for a few months that the emphasis needed to be on therapeutics not vaccines, a realization that finally has them calling on Regeneron (REGN) and others to ramp-up, it's fine and if Sorrento (SRNE) is able to join the effort, there's plenty of demand.

'In-theory'... 'if' Sorrento has the right MAB, aside the testing issue, they might win regardless who wins the Presidency or Congress. If Trump wins, the half baked herd immunity direction is a real (or dangerous) possibility. Very many people with weak immunity may need SRNE’s treatments to stay alive. And if Biden wins, he’ll want vaccines and treatments to be available before opening the Country, or at least not widely opening it. Using the flu vaccine as a guide, chances of a COVID vaccine eradicating COVID are slim. Sorrento treatments in theory would also be sought after in this scenario. So it’s a win-win for SRNE no matter who’s President. Providing of course no subterfuge holds things up.

The U.S. is trying to get through our own situation without mandatory or state imposed lockdowns, and the markets are sensitive to resultant economic data of course. In fact, aside the technical expectations of the recent shakeout, the market looks at economic metrics, and was stunned by the exponential gains of the coronavirus in Europe, where even countries previously doing a superb job were unable to contain it. And of course reopening too-swiftly was the key blame in all cases. That makes it hard for leaders in the U.S. to contradict.

In-sum: so until we see if a 'Blue Wave' or 'Red Wave' crests, there's no real resolution to this expected correction activity . What we'd dread more would be only ripples, and no tsunami in either direction.

Beyond tomorrow (and Wednesday), there is COVID-19. Sobering realization it seems for some: it's not defeated... but roaring with a focus on vaccine rather than therapies, hence imperiling global economics. A glimmer of hope some see this now, as opposed to the cognitive dissonance that prevailed too long.