Larry McDonald: Sell any knee-jerk Clinton rally as dollar likely to surge

The Bear Traps Report
Democratic presidential nominee former Secretary of State Hillary Clinton (C) raises her arms with musicians Jon Bon Jovi (L) and Lady Gaga during a campaign rally at North Carolina State University on November 8, 2016 in Raleigh North Carolina.
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Editor's note: The following analysis is from The Bear Traps Report, a weekly independent investment newsletter authored by Larry McDonald, focusing on global political and systemic risk. Below is an excerpt from his latest note.

— We're still in a late 2007 "sell the rallies" mode, a position that's been our friend over the last 22 months. It was December 26, 2014 [when] the S&P 500 touched a high of 2,092, [and] closed last Friday at 2,085. It's been one long pillow fight. Facing a media and Wall Street guaranteed Hillary Clinton victory, with high conviction, we believe any rally 2-3 percent will be short lived. At the end of the day, a Clinton White House brings a strong dollar relief run. Even worse, a potential short covering rise into a Fed rate hike attempt. The net result for markets? A move substantially lower for oil and rising credit risk. We've seen this show before back in December 2015.