Seattle Bubble Forum Archive

The stock rally on October 28th (the Dow rose almost 11%) is a screaming sell signal. Sharp, swift, rallies are characterists of bear markets, and the biggest one-day wonders have always occured in the midst of big market declines.

Yet the market's still soaring up. What now? I think we'll see the Dow at 8,500 again, but maybe not until after it gets to 10,000 again. Macroeconomic news way worse than analysts expected? Dow flies up 400.

Markets usually react pretty negatively to Democrats being elected, don't they?

Wonder what tomorrow will bring.

To anyone paying attention, Obama's been the clear winner for weeks. So the market should have priced that in weeks ago. Still, the Dow may go up another 500 points tomorrow. Perhaps the rally was a last-ditch effort to help McCain (in lieu of finding Bin Laden), while also providing opportunity for the super-rich to get more money out of harm's way.

Short term. If you look historically at stock prices though, the market does better long term with a democratic president.

Yep, optimism and diplomacy is usually better for business than fear and isolation. Eight years likely won't be enough for Obama to repair the damage though. We'll probably have a lost two decades. Better than the alternative!

Unfortunately, I don't think Obama will be any more successful in turning the economy around than Bush, or that McCain could have done a better job. This economic train wreck took DECADES to make and it is going to take years to unfold, regardless of who gets in office.

If anything Obama is setting himself up to severely disappoint voters by his constant yabbering about "fixing" the economy. This just re-inforces the mis-guided view that the President (or government) actually have the power to control the economy.

By the way, I published a podcast about how lucky McCain was to lose today. Last week I put up a podcast giving the President elect suggestions as to how to address the nation on election night. Unfortunately, it seems that Obama didn't get my memo...

I believe the president can have a great effect on the economy. (Not spending $trillions on unnecessary war would be a plus, for example.) While Obama may not fix it in 8 years, and things will get worse before they get better, he can do a lot of good just by not making the situation worse. I don't blame him for making grandiose promises; if he doesn't promise the world, someone else who does will win instead. I'd rather he get into office and then break his promises.

the market usually moves according to its own internal forces, and the headlines that supposedly drive the markets on any given day usually contradict themselves a couple days later. "market up on cheap oil" "market down on deflationary concerns and oil demand collapse".

the spike was probably a long overdue short squeeze which occurred because of the immensely oversold conditions. about time.

at best this might be a "buy on rumors, sell on news" post-election event. turns out that electing obama didn't magically fix every problem in the world. that just provides a catalyst to shove the balance between the bulls and the bears a little one way or the other, though, and expose the underlying forces at work.

another possible way of looking at is that wall street let obamamanics build up long positions prior to the election on the expectation of a post-election market rally and now those naive investors are getting slaughtered as the financials and hedge funds liquidate onto the euphoric obama investors.

none of those are probably right, but they're as good as any other explanation.

about all you can say is that for whatever reason the market went down today. you need to either bet that the sucker's rally is over and the downtrend is about to continue, or else this a bear trap and all the shorts are going to get killed tomorrow.

without knowing how much liquidation is left to be done, and without knowing wall street psychology about when that liquidation will need to get done, we're all just guessing...