Editor's note: This article originally appeared at 7 a.m. on Nov. 8 on Real Money, our premium site for active traders. To get great columns like this from Jim Cramer and other top columnists earlier in the trading day, click here.
"It has been said that democracy is the worst form of government except all those other forms that have been tried from time to time."
-- Winston Churchill
On Monday, the market placed its bet that Hillary Clinton will win the Presidency. After nine straight down days, the S&P 500 recovered the bulk of its losses, but we will find out today how confident the market is in its predictive abilities.
Trump supporters are focused on how the polls incorrectly predicted the Brexit result and there is much chatter about "secret" Trump voters that have kept silent rather than be confronted for their politically incorrect views. Most polls predict Hillary will win, but there are many that are predicting an upset.
What does the new administration mean for Wall Street? Jim Cramer's first reaction to the election is live on TheStreet's Facebook page Wednesday morning at 8 a.m. ET. He joins our team of reporters along with experts and analysts tracking the markets with us.
It isn't just the presidential election that matters. The Senate will be tremendously important and the polls have control almost dead even. The Republicans are expected to maintain control the House of Representatives but a landslide victory by Hillary could change that outcome.
The news media will be busy with endless predictions and rehashes today, but market players will be unable to do much but wait. The bets were placed yesterday and today will just be some last-minute positioning and lottery bets.
One thing we know for sure is that if Donald Trump pulls off an upset, the market is going to have a negative reaction. Trump creates a huge amount of uncertainty and it will create great confusion. There will be an immediate selloff. How deep it goes and how long it lasts we don't know, but it will take a while for the market to make the adjustment and it will likely be a painful process.
If Hillary Clinton prevails, the question is whether the market has already fully discounted the event. While Hillary creates less anxiety for the market, there isn't any great reason for it to celebrate if she wins. She is likely to be unable to implement much policy without control of the House and that looks like the most likely scenario.
One group to keep our eyes on for some clues as to the market's overall feelings about the election is drugs and biotechnology. These stocks have been fearful of the price controls that Hillary has mentioned a number of times. If the stocks hold up, then it is an indication that the market is confident that gridlock will take hold and this issue is forestalled.
Keep in mind that this is going to be a macro-driven environment right now. Stocks are mostly going to move in tandem and there isn't going to be much opportunity for individual stock picking. The election movement will help to set up some opportunity for stock picking, but in the short term everything is moving on the election news and there isn't any great benefit to focusing on individual stocks. Once the election news is over, we'll have an opportunity to find those names that have been mispriced, but that isn't today's business.
There are always rumors on election day about how the vote is going that can cause some movement, but it is unreliable. We need to wait until tonight and that means staying patient and working on watch lists.
We had a flattish open and not much news other than the election.