Are U.S. stocks set to rally after the election results into year end?

THE TECHNICAL VIEW OF THE MARKETS:What do markets typically do when we see a shift of power from one party to another because of the mid-term elections. And we observed from historical data that one month and one year out that we saw rates where actually flat to slightly lower and then the risk assets where slightly wider. What the pricing of these risk assets have done during the last month. So when we step back and look at the underperformance of risk assets many credit spreads sectors are wider year over year. We actually think the removal of the uncertainty decreases volatility and will be fairly constructive for risk sectors in particular.The volatility is fundamentally driven and earnings driven and that this is peak earnings and peak margins. The option's market is taking this as a corporate earnings event. The decline in stocks is consistent with the idea of the second derivative slowing down. From my perspective it should not be a surprise. Because you had a major event last December which was the corporate tax-cut. Even excluding the tax-cut your earnings are growing 14-15% and revenues are up 8-10%. So I am not particularly worried,because one of the problems we all have is muscle memory is gone in terms of terms of volatility. If the year where to end today the S&P500 would have trade in the narrowest range since 1969. In a typical year before QE in 2009 , going back to 1926 the market the S&P500 trades in a 25%-range top to bottom. This is scary and it does not feel good but my view is that the big thing that is happening is that your transitioning away from monetary policy to other factors such as fiscal policy and regulated trade. This is going to mean higher volatility and better opportunities for active managers.Positioning yourself- Our house view is still bullish going into year end 2018. What we saw in October was about earnings growth, but we also believe that it was exasperated by crowding in the popular growth names. So what we saw like I mention a very low correlation with in the stocks in the S&P500 is atypical of a selloff. Where we did see high correlation and where we did see stress was in Tech andNasdaq. We also saw it in the Hedge fund popular longs, like a basket of FANG stocks those stocks traded with extremely high correlation, higher than we saw in FEBUARY. So that tells me that there was pain at the hedge fund level among active managers and that exasperated the move in the market more than the fundamentals would warrant.Enclosing you are starting to see positioning in the equities derivative market for those names to the upside to year end. Yes, The fund flow we have seen in the last few days , in the index level and single stock level. People are coming around to the idea that this selloff was overdone . And it is the same leadership that is going to lead us in the end.Thank you,John C. Verducci 111