Oh common' Mo. If you can't make market predictions, what is the fun of trading. Shoot, I'll give my forecast (read guess) for the market direction to anyone wanting it, and those who don't as well. It's like a game for bragging rights. The interesting thing is that I (and many other traders here) will argue in support of our predictions all day, but when it comes down to it, my only positions will benefit regardless of the long term trend. I trade what I see, not what I think. But making long term predictions is still fun.
I for one wish the selloff would finally come. Not because i am short but to finally rid us of all the "market top" threads spreading like a mad desease around ET.
If #1 is correct I may agree with you. But your #2 suggests some(many?) are long now and may sell at or around the election b/c the Evil Rovian-Cheney-McChimpyBushitler won't keep propping up the Dow. How much will the tin hatters move the market?
I think one thing worth considering is that if the Dems take the House we are quite likely to see an attempt to increase cap gains and dividend taxes. Also, a nationalization of the entire health care sector of the economy. I'm not saying it will be successful but it will be perceived, rightly IMO, as an attack on the economy. That perception could have a negative effect on the market. I also think the Fed will tighten after the election.
Maybe but lets look at last year. Jul 20 05 VIX dipped below 10. Then till Oct SPX gradually slid -3%, but then finished up 1% end of 05. Now is up about 12% since that VIX low. There may other reasons to expect a correction, but VIX alone doesn't seem enough.
Really? That's genuis. So if enough people want something to happen it just ceases to be a possibility. I've got to remember that. Based on this logic, the Nov-Dec rally that everyone expects won't happen either, or is that different?
The hedge funds control this market, not John Q Public. If the hedge funds are worried about downside exposure, they hedge. There is no reason for them to dump positions that could be in the billions because of an event that at the end of the day amounts to just noise. Take the politics out of it, it has no bearing on this situation. It's supply and demand.