At this point, Florida has certified its vote, with Bush as the winner. Lieberman has spoken, saying the Democrats will protest the certification, and futures are way up.
The weekend Hahn report states that a rally in the Nasdaq is expected this week, accompanied by weakness in Dow stocks-- the extreme sector rotation that Don Sew writes of so elegantly on the Stock Attack thread.
Interestingly, the Sunday Option Investor newsletter is not as bullish on a Nasdaq rally. Here's a snippet:
"
So why am I cautious about the rally? Multiple reasons give
me cause for concern. I loved the fact that of the 300 stocks
I monitor on a daily basis only 14 were down for the day and
only 3 were down more than -$1. Can't complain about that!
After looking at the individual charts on all 300 I noticed
one thing. Many, and I mean many, had a big spike at the close.
What this is telling me is that there were a lot of traders
covering their shorts in front of the vote count deadline on
Sunday. Anybody short last week did very well but with the
possibility of the election reaching a new level of completion
and/or complexity over the weekend these same traders decided
to run for cover at the close and pocket profits instead of
leaving open positions at the mercy of the news.
Still the volume was very weak. This allowed the short covering
to artificially inflate the prices showing more strength than
we can really find. Another downside to this is the big gains
at the close. They will produce instant profit taking if the
weekend news is at all negative."
In all, it remains to be seen how the market will digest the most recent election news over the next few days. My impression is that, while Bush has not seen fit to declare himself the winner, it is becoming clear that he will be our next President, and the markets will go about their business, with any remaining election impact fading daily. |
