Mid-terms were definitely not a total rebuke of President Trump, despite the Democrats taking control of the House.  According to Fox News:

  • Since 1862, the President’s party has lost an average 32 seats in Congress in a mid-term election.  Trump likely lost roughly two dozen
  • There have only been four prior instances of a President gaining Senate seats in a mid-term election.  Trump gained 2
  • President Obama lost 6 seats in the Senate and 63 seats in the House.

Clearly, there is going to be gridlock, but that was to be expected.  We continue to believe the market is currently experiencing an oversold bounce from the extraordinary drop in October.  As we pointed out in our bottoming process playbook, such extreme oversold conditions produce a bounce, that is followed by a retest of the lows, which ushers in the next intermediate-term leg up to new highs.



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