History will repeat itself, but which history. Why can't the 2000 post-election market selfoff serve as a model for this upcoming election? Personally, I think election results and news in general will have very little effect on the markets. The market will do what it wants to do. If it wants an excuse to selloff, it will interpret the results accordingly, regardless of what happens. Today, the Saudis announced a major terror threat to their oil supply, yet the price of oil fell. Why? Because the market wanted to go lower. With that being said, whatever the market does up to the elections, the elections will serve as a catalyst to reverse the shorterm trend and then the market will continue to rise until the fundamentals change.
This is my view also, and the reason I started the thread. Buy on rumour, sell on news and the news is the mid term elections. DIA puts are very cheap now.
Yeah, this market is looking for an excuse to selloff. Everyone knows the rally is not sustainable. I do not know about all the greek theta beta alpha shit, but I know an overbought market when I see one.
the market might just decide not to wait on the election outcome. what if it falls under its own weight before Nov 7?
What fundamentals? You mean the key numbers the govt. put out and then quietly revise down 2 weeks later?
well wait until the revision, then go short when you see a signal... I looked at those GDP numbers and it spells the following picture to me: 1) relatively strong economy (minus housing) - and while the housing component is a large burden on it, anyone who didn't expect the housing burden is a fool. furthermore, those surprising new housing sales #s from before might offer a floor this. I still think housing will correct another 20-30% in the next 5 years, but my point is perhaps home builders will be aggressive and keep the housing market going by aggressively lowering prices and keep inventory moving. And as long as wage growth continues, there is a relative foundation to this housing market. Perhaps by next yr you'll see positive qtr over qtr #s on the residential property side component of GDP. Once you see this, off to the races again. 2) weakening dollar pressure (export balance component) - provides economic stimulus to us... 3) strong personal incomes - the foundation of support for continued spending and prevention of total collapse of anything. 4) questionable autos component (because so much inventory in 3q was cleared with one time incentives/etc)? this part alone made GDP growth look like 1.6 instead of 0.9. I'll be devil's advocate and say the 1.6 could be solid on the basis of oil continuing to be cheap. If oil stays cheap, American SUV sales will stay. Just call your local Toyota dealer. They have a record # of Prius' on the lots. People are back to their old ways. So conclusion: hedge your long S&P futures with long oil contracts. Because fundamentally expensive oil leads to lower spending power (=lower wage): housing and cars are the first to go. I'm waiting for the day of negative personal income growth and pricy oil - thats a short signal. neither are here right now, and that is why the markets are going up. Also - I think the markets won't notice a democratic landslide (in the big picture, maybne you'll get a one or two day selloff) -- everyone is already expecting one. Its priced in. The very existence of this thread is proof. PS: I take my arguments off the table if new home #s and GDP #s are revised downward after elections.
I would think that even if the Dems win the House and the Reps keep the Senate the market would react in a positive move. The Dems would not be able to repeal the tax cut; thus everything should stay the same. Gridlock, for a better word, is good for the market. Nether side can take advantage of the other.
And let me guess, you continue to spend everyday of the week posting on ET because you feel like a Veteran trader and it helps feed your insecure Ego? How absurd.