I disagree. I think the Dems winning is a bullish item, not bearish. I am not at all liberal but what does it tell you that right now Wall Street is betting heavily on the dems with their pocketbook. Even hedge fund giants Citadel and Renaissance Technologies (James Simmons) are heavily contributing to the Dems campaigns.
I think they are counting on gridlock. Notice I said that I was not saying those things would be successfully legislated. Just the perception of those changes may create a market break.
Furthermore, I think there needs to be a true catalyst for this market to correct itself. This past May's correction was driven by expensive oil, inflation prospects, and primarily fed policy changes. I'm not sure if democrats being elected is enough to stimulate a selloff. If the economic news and earnings are fundamentally good, then I see no reason why this won't continue well into the holiday season and beyond. I hate to say it, but I think people should be more concerned about oil right now than politics. Expensive oil remains the biggest threat to economic growth - more than interest rate policy, politics, or vix being historically low. A few weeks into winter, with a drawdown of heating oil supplies, as well as OPEC following through with its rhetoric, compounded by external stimulus by Iran/etc... and oil is back to $70 and everyone is on edge if it will have lasting limiting effects to economic growth.. On second thought, this oil/energy thing is more likely to replay next summer, especially if hurricane fears return and this upcoming winter was cold (burning through supplies). ... so on that thought, maybe we're good til next April, due for a little pause/correction in late Dec/Jan for tax time ...
Yes, but you are making the assumption that those things would be a deemed a negative. I'm not sure this is the case.
also did anyone consider there is a bias here on ET because most ET traders are thrilled at the novelty they can some how be contrarian to the long bias of the market at will by shorting ES futures ?? All of us are personal hedge fund managers by definition -- so all of us are biased looking for the top of a decent rally. Few of us want to believe good times are here to stay (including myself). ... and so i buy vix calls and go long most everything else (except a few select morsels I go short) ...
gridlock is a sign that the status quo is better than the alternative -- at least, in a true representative democracy. I'd rather have no change than lousy hasty changes (er... bush policy). Bush years needed more gridlock if you ask me, especially concerning items like patriot act...
hmmm just a 3 weeks ago a democratic win was a NEGATIVE for the market, NOWWWWWWWWWW all of the sudden its a positive. This is getting to be one complete joke...
Says who? CNBC? Come on man, you need to spend more time watching the Animal Planet, it's much more healthy for you then CNBC. LOL. Gridlock is always seen as a bull item. During the Reagan years, we had a democratic house and senate, During the Clinton years from 94 on we had a republican house and senate. Those were the boom years. I think gridlock is the biggest bull item going now. I haven't heard one reputable person say it would be viewed as bearish. Now if the dems win the house and senate and win the white house in 08, well, that's a different story.