Obama Wins - Wall Street Loses
Posted On Tuesday, November 4, 2008 at at 1:14 PM by Chris
As we progress further into "Rave Week", we continue to find surprises. Although, we did anticipate a rally this week, with the fact that historically stocks have rallied following elections. One thing is for sure, Wall Street does not like uncertainty, which is why in most cases there is a slowing prior before elections. However, with certainty comes a rally. In this case, with the polls strongly favoring Obama to win today, it seems as though Wall Street has already made up its mind, finishing the day over 9600. It seems as if they feel the uncertainty is over. Remember, I cautioned for the possibility of a rally towards 10000, since the 9200 threshold was reached. But tomorrow will be tricky. As when news is expected to be announced, like the Fed Rate cut, or high earnings, there is usually a bigger run before hand factoring in the expectations. I believe we have experienced that "anticipation" of the election today. However, when the excitement settles and America "sobers" up, we will still be in the same financial crisis we started months ago, and this time Head Deep. Look for a new bottom to be established in December or January.
Tomorrow, I believe we have a good chance to keep this rally going. Foreign markets should respond well this evening to the election and strong performance in Wall street, which should carry over into tomorrow. However, I think this rally could be put to a sharp halt on Thursday and/or Friday. Like I said yesterday, employment news is announced on Friday, and that can't be good.
The only thing keeping the market above 9000 the next couple of weeks will be the short squeeze we are experiencing, because of Redemptions due in Mid November. Until then, we may see this awkward stimulated market, with the help of some market manipulation. Just remember, we aren't even labeled a "recession" yet. We have a ways to go.
So what to do. As expected, we saw big moves in GDX and AIG. I think I will look to sell AIG as it approaches $3. GDX looks like a good sell for me at $25. Both have been great this past week and still should move. GDX has moved 30% in the past few days where AIG has almost doubled.
LOAD UP ON FXP, Wow! I was extactic to see it go below $80 today. I picked up another good load of shares today at $74. People, I know it's hard to see the sharp decline in buy into it, but this is a steal. The harsh times that lie ahead for the end of the year will directly show in the value of FXP. I believe we will hit the $200 price by January.
For Tomorrow, expect another rally, maybe not as strong as today. This may be the last day to get FXP at this strong, discounted price. If you still are in GDX or AIG, you may want to consider selling of some if not all your shares tomorrow, before the market gets struck. SKF and SRS are getting very close to purchasing price, I'm just waiting a bit longer (although that is a gamble, because this could be the lowest it goes). Be patient, like I said in prior posts, in this round of FXP, we aren't going to see a double in a week like we did last time. We may have to wait a month or two this time. So be patient, Happy Trading and we'll look to see what this market does tomorrow. Oh and if McCain somehow wins tomorrow, who knows what the market will do, all bets are off. See you Tomorrow.
AIG back down near $2 didn't get a chance to sell it closer to 3, Atleast SKF and FXP are up!
Ya, I thought AIG would get closer to 3 too. Im glad to hear you're in FXP and SKF. Those ETF's are rockstars.
It will take more than winning wall street to fix things
As I reported previously, the screw coming out of my bag wasn’t something that I found atrocious. Over time and with use, bags will wear a bit, and of issues you can have with a bag, a screw falling out is a best-case scenario because it’s a straightforward thing to fix.