Two Trades to Prepare for the "Day After"

Shah Gilani

It's almost here. Election Day, that is.

Are you ready?

Do you have all your "ducks in a row?"

Are you swinging for the fences with your candidate and at the same time preparing for the worst?

When it comes to your portfolio, or positioning for the "day after" and what might happen, you need to get your ducks lined up and make sure your hopeful dreams don't turn into your worst nightmare.

Today, I'm going to give you two stocks I'm buying right now… just in case.

Here's what to you need to know…

A Nightmare Scenario Could Be Building

As far as the markets, a nightmare scenario isn't out of the question. In fact, it's more than just possible.

It's not that equities traded down for seven consecutive days that's worrisome, after all; we're still so close to all-time highs.

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It's not that net earnings are probably going to fall again this quarter, marking seven straight quarterly drops, because after all, we're still so close to all-time highs.

It's not that the Fed is seeing stronger wage growth in a tightening labor market and is likely to raise rates in December that's worrisome, because we're so close to all-time highs.

In fact, nothing should be that worrisome for the markets, including this election, because after all, we're still so close to all-time highs.

Unless of course you're worried precisely because we're so close to all-time highs.

I am.

What we need to worry about is profit-taking, precisely because we're so close to all-time highs.

There's a lot of money sitting on the table, which could get wiped off if election jitters turn to profit-taking, which forces traders and investors to the exit doors to actually book their paper profits, all at the same time.

With a lot of negatives hanging in the background, and the markets so close to all-time highs, some are starting to believe they're close to turning the corner and leaving all the bad news behind and just flat-out discounting lingering doubts all the way to higher all-time highs and then some.

But not many folks are thinking that way. And that's what is worrying me the most.

The election could be the sell trigger that gets a negative feedback loop churning.

So it makes sense to expect the unexpected and be prepared for what could be a nightmare scenario.

Last week, I recommended buying volatility, expecting it to ratchet up – if not soar – in the event of widespread, panicky selling.

I also recommended straddling the market by buying calls on a market-based ETF and buying calls on an inverse market-based ETF. I prefer buying calls because puts have been somewhat overpriced lately as investors increasingly edge into them for election protection.

Here are two stocks I think could skyrocket if things get ugly on Tuesday…

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Shah Gilani

About the Author

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Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains.Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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