...and from the WaveStrength-- it's an add for their newsletter but there's enough real content to post.
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If you think were in a state of nerve-wracking anticipation, just think about the candidates. Or the Washington Redskins, for that matter!
And add to this mix all the new hoopla surrounding the recent bin Laden tape and his attempt to cut down on the number of red states. Although its understandable why we received the message from bin Laden in such a timely fashion, it hasnt exactly made anyone less nervous. In fact, I believe therell be a few new nail-biters out there pretty soon.
But lets talk about election facts, shall we? (Or rather the dissemination of data? Or how about everyones two cents?)
The Dow:
Were aware that, historically, a Dow rally of a point and a half in October indicates an incumbent win for the White House. And if the Dow drops close to 0.5% in the harvest month, the challenger wins. This has been true with only two exceptions since 1904, the deviations being Eisenhowers reelection in 1956 and Reagans in 1984.
So, drum roll, please: In case you didnt know, October saw a 0.52% drop in the Dow.
For a Bush win to be certain, the Dow should have gained 3.3% or more. That means that at the end of trading last Friday, the Dow should have shown a close of 10,413.
But Jeffrey Hirsch, the madman behind all of this election market research, says that the 291-point Dow increase in recent weeks gives Bush a bit more leeway over the century-old model.
Kerry, 1. Bush, 0.
The Redskins:
Easy enough. Adam did the research for Market Report a few weeks ago, saying, If the Redskins win their last home game prior to Election Day, the party in power stays in power. Conversely, if they lose the game, the incumbent party is on the street.
Who won last night? I believe it was the Green Bay Packers. So there we go.
Kerry, 2. Bush, 0.
Texas versus Massachusetts:
Found some interesting information about individual Kerry vs. Bush stocks.
It seems that Texas-based companies are outperforming Massachusetts-based companies. 417 Lone Star state stocks are up an average 18% compared to the Old Colonys 2.4% average gain in its 360 state-based stocks. (As a side note, the Texas stocks are also cheaper.)
Of course this could be nothing but a battle of wills between energy and techs.
But just this month, like the candidates, Texas and Massachusetts stocks are trading at dead-heat percentages: a gain of 0.8% versus 0.6%, respectively.
But well give this one to Bush.
Kerry, 2. Bush, 1.
Halloween:
George Bush Halloween masks outsold John Kerry Halloween masks. Were not sure whether thats because a lot of people were making fun of George Bush or because they didnt want to be mistaken for a horse.
Anyway, this fits right with the Redskin game as good superstition.
Kerry, 2. Bush, 2.
The Future:
So there we are. Just like with all the other indicators, its a dead heat.
Whats worse is that we all have to worry that this might not be a dead and decided issue by Tuesday night when we put our heads down to count sheep. Or even by Wednesday morning, when we reach for our first cups of coffee.
The uncertainty of the current economic and political environment, American and worldwide, is practically unprecedented. Just four years ago, a decline in the Dow of 1.7% followed the presidential Supreme Court decision in 2000. Consumer confidence levels have retracted greatly in the last few months, though we could still see a rise in those numbers with the upcoming holiday season. Not to mention that the dollar hits lows against the euro every week. And it could get worse.
Wall Street is expecting a relief rally, something the market might miss if the relief sits on the sidelines for another few weeks. And if Wall Street really doesnt like the incoming president, we can expect a downturn to raise its ugly head.
What do I think will happen? Im expecting a drop either way, or no way. I see current levels at highs that are less strong and sturdy than most want them to be. The major indices are at their ellipse tops. On the Dow, momentum is peaking downward and the MACD is still under neutral.
Luckily for us, we dont have to guess the outcome to trade it. Traders are playing a straddle that will profit either way or no way as well.
WaveStrength Traders, 1. Sideline investors, 0.
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