Expect light trading on Election Day. Equities traded higher Tuesday, as momentum from Monday's higher low, and the U.S. dollar weakened, help the bid side.
The S&P 500 index hit its highs Tuesday morning, just below the major 1,418.25 resistance level. I will think it would be conservative and smart to wait for the market to get over 1,415 and against this resistance level before selling. However, as I watch the market Tuesday morning, I am not in a hurry, and do not want to fight the tape. I will keep a close eye on a day trade to sell, and may wait until after the cash market opens Tuesday at 8:30 p.m. CT.
How will the market react to the outcome of Tuesday's election?
(Read More: Presidential Candidates Make Final Sprint in Key States.)
Well, it is a bit uncertain. If Republican challenger Mitt Romney wins over President Barack Obama, I believe the market will trade higher initially. Still, after the luster of initial days wanes, there will still many issues on the table — such as the "fiscal cliff," European debt crisis and China. Not to mention the question of whether the U.S. Federal Reserve will continue to accommodate poor economic conditions by way of quantitative easing — a bond-buying program.
(Read More: 'Fiscal Cliff' Deal Won't Help US Rating: Egan-Jones.)
I will look to see light support at 1,410 - 1,412, which would also provide a buying opportunity on day trades. A close on the highs will likely send this market up to the 50-day moving average at 1,428.50.
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