All Not Lost Yet

Just when I was beginning to think I missed my market range predictions entirely, something strange happened. The market reversed direction yesterday. Expecting some new announcment from the government, fed, or someone, I found nothing to account for the turnaround other than buyers found stock prices attractive and came back into the market. Even in spite of announcements from Intel with lowered earnings expectations in the near quarters, which depressed the market early, the stock and broader markets provided a surge before the close.

This is a good sign, because it indicates that stocks are beginning to find their new price support levels from which to trade. This makes for good basing action and, hopefully, support for future recovery.

Stock market indeces tend to be leading indicators, meaning that prices tend to take into account future expectations. If price support levels hold up generally well even under current bad news, it means that investors & traders are already positioning for recovery. As always, time will tell.

A Little Lower

I expected today to be more positive for the markets. After a couple of days's declines, I was looking for some flattening out. But now the DJI is at 8283, a bit below my predicted 8300. Still a lot of unknowns, but I'm still hoping for some post-election quieting down. We'll see.

Time for Obama to Make Decisions

Two days of post election with the winner Obama has resulted in two days of market downturn to the tune of about 930 points on the Dow Jones Industrials (DJI) index.

This is still in keeping with my prediction that the stock market will begin settling out and forming a base ("Calming Down"). I'm pegging a DJI trading range between 8300 and 9500. Those aren't absolute precise figures, but I think they are close.

Obama needs to state make economic decisions known, though. As I previously wrote, I think that we will see a weaker market with an Obama win because no one really knows how his economic policies will shape up. I doubt that even he knows. He promised higher taxes - for the "wealthy" of course - but also backed down saying that he would postpone raising taxes if the economy is in recession.

I mentioned to my wife that a vast majority believe, probably, that the administration of President Bush is over and that Obama is now President. I think that Obama believes that, so it is now up to him to clarify and solidify his economic policy ideas. Waffling during the election is one thing; declaring uncertainty now is quite another. It's too late for that. Time to fish since cutting bait is no longer one of his options.

Yep

Still on target...

*****

Indications: U.S. stock futures trade lower after Obama victory
By Steve Goldstein MarketWatch11/5/2008 5:17:00 AM

U.S. stock futures dropped Wednesday as traders locked in profits and focused on the deteriorating economy that President-elect Barack Obama will inherit.

Right So Far

Looks like my post from yesterday was right. Even before election results are anywhere close to being known, investors and traders are just glad to get this election over with. The Dow jones Industrials opened with a gain this morning. Time will tell.

Calming Down?

I predict that after tomorrow (election day), the stock markets will begin to show calmer action and finally begin to form a reasonable base. My reason is simple: we won’t be as subject to the end-of-the-world, gloom-and-doom scenarios we have been enduring in these weeks, months, and years of political mayhem. A great deal of the panic-induced choppiness will begin to be eliminated, and both investors and traders will begin to make reasonable decisions again.

I think that the markets will respond more favorably to a McCain win than to an Obama win, but that’s just me. The markets will tend to better understand and digest McCain’s proposals. Obama’s policies remain largely unformed and, therefore, present a higher degree of uncertainty. On the other hand, the markets appear to be responding favorably now to government-imposed “solutions” to the economic “crisis.” Either way, I still think that we will begin to see and experience narrower price swings in the markets.

All of these views are predicated on the assumption that there is no new major catastrophe – natural or man-made – that afflicts us at home or abroad. Any such incident is going to naturally cause a disruption in the markets.