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Monday Market Uncertainty – Waiting to See Who Runs America

ilene's picture




 

Monday Market Uncertainty – Waiting to See Who Runs America

Courtesy of Phil's Stock World

Today doesn't matter.

Tomorrow won't matter either. Nothing will matter much, trading-wise, until we know what direction the US will be taking for the next 4 years. Not only do we not usually get such a stark contrast in political viewpoints to vote for but also this is such a critical (and precarious) time for our economy. It's not all surprising that we've had some wild gyrations leading up to this event.

However, for all these ups and downs, we still haven't failed the September lows – other than the AppleDaq while the NYSE, our broadest index, has been making some good progress, matching the S&P and Russell to hold roughly 2.5% above the Must-Hold line while the Dow and Nasdaq are below theirs, but holding their 200 dmas – for now.

Notice how the indexes ran back to our bounce levels but were soundly rejected there on Friday,where I warned Members in our Morning Alert:

Let's keep those strong bounce lines in mind – we got 3 of 5 but not impressive until 5 of 5 as the goals were not very high-bar:

  • Dow  -  13,170 (weak), 13,300 (strong) – now 13,267
  • S&P  -  1,418, (weak), 1,431 (strong) – now 1,433
  • Nas   –  3,010 (weak), 3,050 (strong) – now 3,026
  • NYSE – 8,220 (weak), 8,280 (strong) – now 8,329
  • RUT   –    818 (weak), 826 (strong – now 830

That's where we were at 9:48 am Friday morning. It was downhill all day from there, and we ended up failing all of our weak bounce levels except for the NYSE, which is barely over its bounce level at 8,235. In the bigger picture, we need to hold those Must Hold lines on the S&P (1,360), NYSE (8,000) and Russell (800), with the Russell closest to failure at 814.  Just like we needed all 5 indexes to bounce to get bullish – we need all 5 indexes to fail to get bearish – otherwise, we're simply playing a fairly narrow 5% range while we wait for the market to decide which way to go.

Whoever wins the election – attention will immediately shift to the "fiscal cliff" crisis and the G20 finance ministers are already freaking out at their meeting in Mexico and calling for swift action to prevent an automatic $607Bn in US tax increases as well as "automatic" spending cuts that go into effect in January if no resolution is reached.

“In the near-term, clearly the U.S. situation is the higher risk” compared with Europe, Canadian Finance Minister Jim Flaherty told reporters.

Assuming the cuts pass through entirely to the economy, a 4 percent consolidation would be enough to shrink the U.S. economy 0.5 percent next year and generate a 2.2 percent contraction in the euro area and limit Chinese expansion to 4.4 percent, according to a model created by Dario Perkins, a former U.K. Treasury official now at Lombard Street Research in London.

Bloomberg reported, Highlighting the growing unease toward the U.S., 42 percent of investors polled last month by Bank of America Merrill Lynch identified the fiscal cliff as the main threat to their strategies, up from 26 percent in August. By contrast, 27 percent branded European debt their main concern, down from 65 percent in June. While the ECB has calmed its markets, Greece’s government will this week try to piece together political support for further austerity needed to keep aid flowing. Meantime, Spain is holding out on tapping a bailout, and there are differences over the speed of a continent-wide banking union.

"Japan, which has a debt of 237 percent of GDP, is also facing fresh budgetary challenges. Its Ministry of Finance is warning that a refusal by lawmakers to authorize 38.3 trillion yen ($476 billion) in borrowing risks leaving the government unable to hold debt auctions as planned.

"Whether the route to lasting economic recovery lies through austerity or measured stimulus remains an evolving debate within the G-20. Just two years ago, the group’s advanced nations, with the exception of Japan, vowed to cut their budget deficits in half by 2013 and stabilize or reduce government debt as a share of GDP by 2016. IMF forecasts show only Germany, South Korea, Canada and Australia largely on course to meet both goals." (Bloomberg)

The election won't really solve any of this, of course, but at least it will move us on to the final stage of negotiations with Congress and, if either Romney or Obama are able to do something about the Fiscal Cliff before the holidays – we may get our Santa Clause Rally after all. Obviously, that's more likely with Obama as Romney wouldn't actually become President until January – and we can't afford to wait that long with the artificial deadlines in place.

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Mon, 11/05/2012 - 23:30 | 2950810 brokesville
brokesville's picture

8 years of obama, you will fucking be in barter town

Mon, 11/05/2012 - 23:15 | 2950783 Winston Smith 2009
Winston Smith 2009's picture

"Waiting to See Who Runs America"

Why wait?  The answer is: Exactly the same people running it now.  Only the front men might change.

Mon, 11/05/2012 - 23:19 | 2950790 hedgehog9999
hedgehog9999's picture

Eggxactly, bunch of puppets they are.

Mon, 11/05/2012 - 23:15 | 2950778 hedgehog9999
hedgehog9999's picture

it really does not matter. They have postponed the inevitable for as long as possible. Now, whoever gets elected has to face the music while New Yorkers freeze.

Good luck to the winner. in the mean time geithner and ben are looking for a place to hide. At least  they see the light, dim as it is.

Mon, 11/05/2012 - 23:43 | 2950831 monad
monad's picture

I recommend Hawaii. Go squat at Barry's, he loves New Yorkers. If you can't make it that far, Hilary has a place in Westchester, and her patriotic neighbors can definitely afford to kick down to help out their polite, civil and earnestly needy fellow citizens.

Mon, 11/05/2012 - 23:06 | 2950761 monad
monad's picture

from Worldwide Effects of Nuclear War, 1975, by real scientists at NAS, before NAS officially changed their policies about lying about everything


Probably the most serious threat is cesium-137, a gamma emitter with a half-life of 30 years. It is a major source of radiation in nuclear fallout, and since it parallels potassium chemistry, it is readily taken into the blood of animals and men and may be incorporated into tissue.

Other hazards are strontium-90, an electron emitter with a half-life of 28 years, and iodine-131 with a half-life of only 8 days. Strontium-90 follows calcium chemistry, so that it is readily incorporated into the bones and teeth, particularly of young children who have received milk from cows consuming contaminated forage. Iodine-131 is a similar threat to infants and children because of its concentration in the thyroid gland. In addition, there is plutonium-239, frequently used in nuclear explosives. A bone-seeker like strontium-90, it may also become lodged in the lungs, where its intense local radiation can cause cancer or other damage. Plutonium-239 decays through emission of an alpha particle (helium nucleus) and has a half-life of 24,000 years.

To the extent that hydrogen fusion contributes to the explosive force of a weapon, two other radionuclides will be released: tritium (hydrogen-3), an electron emitter with a half-life of 12 years, and carbon-14, an electron emitter with a half-life of 5,730 years. Both are taken up through the food cycle and readily incorporated in organic matter.

Three types of radiation damage may occur: bodily damage (mainly leukemia and cancers of the thyroid, lung, breast, bone, and gastrointestinal tract); genetic damage (birth defects and constitutional and degenerative diseases due to gonodal damage suffered by parents); and development and growth damage (primarily growth and mental retardation of unborn infants and young children). Since heavy radiation doses of about 20 roentgen or more (see "Radioactivity" note) are necessary to produce developmental defects, these effects would probably be confined to areas of heavy local fallout in the nuclear combatant nations and would not become a global problem.

 

Mon, 11/05/2012 - 22:40 | 2950664 news printer
news printer's picture

US Presidential Third Party Debate LIVE .

Libertarian Party candidate Gov. Gary Johnson 

Green Party's Jill Stein

Mon, 11/05/2012 - 21:41 | 2950541 are we there yet
are we there yet's picture

Previous elections had lots of bumper stickers on cars.  Not seeing it this election. Don't know what it means.

Mon, 11/05/2012 - 22:34 | 2950687 Muppet Pimp
Muppet Pimp's picture

a keen observation no doubt...same thing here in FL...absolutely no obama stickers...couple of RR stickers but generally speaking no advertising on the cars....no rah rah rah atmosphere of the last election....more like a somber 'we hope this whole USA thing turns out ok' type of attitude.  

Mon, 11/05/2012 - 21:11 | 2950479 ebworthen
ebworthen's picture

 

 

Two things that will go up no matter who is elected to whatever office tomorrow:

  1. Death
  2. Taxes
Mon, 11/05/2012 - 21:04 | 2950464 disabledvet
disabledvet's picture

Should be interesting if we have some type of "tie." historically Civil Wars are equity positive...and I have taken note fuel prices are collapsing. Go Mayhem! Run riot Division! Let loose the Cannonades of Chaos! Why pine for mere Debt Jubilee when we can Let Loose the State of Anarchy! I call for Mint Julip Nation...commencing The Aftermath! Are you with sheeple! Enough of saying you've had enuf...say you MORE!

Mon, 11/05/2012 - 20:44 | 2950422 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

Meet the new boss, same as the old boss.

Mon, 11/05/2012 - 19:45 | 2950261 bugs_
bugs_'s picture

who run bartertown?

Mon, 11/05/2012 - 20:57 | 2950453 Midas
Midas's picture

So you are writing in Master Blaster?

Mon, 11/05/2012 - 21:13 | 2950481 onelight
onelight's picture

We don't need another hero... /sarc

Mon, 11/05/2012 - 20:43 | 2950421 TraderTimm
TraderTimm's picture

Hey bugs_, the gang misses you.

Mon, 11/05/2012 - 19:42 | 2950247 Translator
Translator's picture

but but but,,,,,,, Zerohedge just posted that 'both candidates are exactly the same'

 

 

Can't you read, Sheepie?

 

 

 

remember, at this point a vote for Ron Paul, or anyone else than Romney is a vote for More Obama.........

 

 

Don't be a stupid sheepy gimple

Mon, 11/05/2012 - 22:10 | 2950617 Spastica Rex
Spastica Rex's picture

Good one.

Hope springs eternal.

Root fer yer team!

Mon, 11/05/2012 - 20:16 | 2950343 CPL
CPL's picture

And the counter measure Jill Stien to rob votes from Obama.

 

The balance is struck.  Don't assume the popular vote won't be captured by her.  And good on her for kicking the beast with the rest of the third parties.  There are other flavors in the world other than choclate and vanilla.   Like Toffee Grapenut Raisin

Mon, 11/05/2012 - 19:33 | 2950225 knukles
knukles's picture

The banks

Mon, 11/05/2012 - 19:27 | 2950207 Parrotile
Parrotile's picture

Monday Market uncertainty. Waiting to see who runs America

Seems there might be a typo there - shouldn't it be "Waiting to see who RUINS America"??

Mon, 11/05/2012 - 19:16 | 2950170 rhinoblitzing
rhinoblitzing's picture

"Obviously, that's more likely with Obama as Romney wouldn't actually become President until January – and we can't afford to wait that long..."

Do you also subscribe to the veiw that "We have to pass the bill to know what's inside it"?

 

Mon, 11/05/2012 - 19:01 | 2950118 Praetorian Guard
Praetorian Guard's picture

WTF are you smoking?

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