Let's make our predictions for the market impact of the Congressional elections now and then later we can discuss the results. I will start with my prediction:
1. I think the recent market rally has been due in part to an expectation that Republicans will not win enough seats to drive on with the impeachment proceedings. An expectation that the election will not be a bad referendum on Mr. Clinton. There was a huge rally when he was re-elected 2 years ago, another rally when it seems that he will hang on.
2. If the Republicans win veto proof control of Congress, or even come close by picking up several seats, we can expect the Starr saga to drag on for two more years. The stock market will promptly crash in this event.
3. If the Republican gains are small, or even losses, so that the current balance of power is not shifted, we can expect the current market rally to explode and we will see new market highs before yearend.
There is my prediction. Now let's hear yours............. |
