Interesting article... http://www.thestreet.com/markets/aarontaskfree/10064700_2.html First time I've seen a generic media type outlet publish something like this. Excerpt: "On the international front, Bush faced rising opposition to his strategy regarding Iraq, including from some previously staunch allies. It sounds perverse, but perhaps the stock market's selloff this week stems, in part, from traders' concern that war with Iraq will be avoided. Given that many participants continue to recall the 1991 scenario and expect the market to rally sharply if and when war commences, it's not outrageous to think some might be momentarily disappointed by an outbreak of peace. " As well I found this article: http://www.guardian.co.uk/Iraq/Story/0,2763,882074,00.html Just as damaging to the US position will be the insistence to the UN security council by the chief nuclear inspector, Mohamed El Baradei, that his team needs several more months to complete its work and that some important testing equipment has only just arrived in the country. "Their report card will be a 'B'," said Mark Gwozdecky, a spokesman for the International Atomic Energy Agency (IAEA), which is carrying out the nuclear inspections. "We've been getting where and when we want to get, and we've been generally successful in getting what we need." I'm not putting these up ala wild to bolster my opinion that there won't be a war. I just thought they were valuable to the dialogue here. Cheers.
IMO- In my own thinking and strategy there is a lot of downward pressure on the market with the threat of war. The main worry has been a massive upturn that could happen if Saddam left or was taken out before a strike. Now with all the resistance etc. he has to be emboldened to stay longer, which extends the threat of war and takes away or pushes out the chances of a bounce on his departure or some other quick resolution. I believe much of the excessive war rhetoric was designed to try to persuade him to leave or encourage others in Iraq to take care of him. Now that waving of the big stick is not going to be as effective so the whole scenario is put off or extended. This problem will have to be dealt with at some time so the cloud still hangs and the odds of a strong bounce on resolution are diminished.
the "war" is a convenient scapegoat for the markets. there other more difficult problems to resolve. once the war is resolved, the markets will bounce and euphoria will reign supreme. that will be an excellent time to short, unless something changes for the better in many areas of the economy.
Exactly- There are the fundamental problems with the market, excluding the Iraq thing, which will have to work out but the pressure is probably downward. The bounce that resolution of the Irag problem could be sharp, fairly significant and last a little while but after that the fundamentals will once again reign. The problem is one of timing and odds.
Fundamentals...... the driving force. Fortunately as users of TA we don't have to use fundies. We can just measure how the fundies are being interpreted by the big money which actually drives the market. Nice post Doubter. As Cheeks also said, the p's and e's are out of wack, and if the e's don't resolve the problem, the p's will.