Thursday, October 25, 2012
Saying that this or that administration would be better for the markets is pointless; it simply doesn’t matter who is president.
Once November’s election is over, the market will play out in accordance with the technical setup that continues to evolve. At present, that consists of a Dow Theory primary bearish trend change that occurred in August 2011, and a Dow Theory non-confirmation that began forming in February. Also, in May, both the Industrials and the Transports again closed below their previous secondary low points, which triggered yet another bearish primary trend change. This confirmed the bearish primary trend change from August 2011.
Since then, the Industrials have moved to post-October 2011 highs while the non-confirmation with the Transports has continued to grow. Few understand the seriousness of these ongoing developments. Unless the outcome of the election can somehow mend this technical erosion, which is unlikely, then this ‘stealth setup’ will continue to evolve post-election.
The public seems to believe that US presidents have the ability to ‘fix’ everything, including the economy and stock market. They don’t. Politicians’ belief that they can ‘fix’ things got America into its current morass. To think that one administration or another can somehow ‘fix’ it is a fairytale.
Dow Theory is a barometer of economic conditions; currently it says that the economic storm hasn’t passed; that we may simply be in its eye, with round two on the horizon.
Posted by Unknown at 12:01 PM