The Perfect Storm of the Presidential Election
Decision day has arrived for those with the ability to vote.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
Election Day is here and you know what that means—decisions, debates, and divisiveness; and at the end of the day, we may not have any more clarity than we do now.
Hurricane Sandy provides the perfect cover for controversy, which would be apropos given the wild ride this year. This is conjecture, mind you, but when the dust settles, my sense is that Obama gets four more years. You know it won’t come easy.
With that said, I will offer a contrarian view. As backward as it sounds, an Obama victory could stave off an entirely more profound stock market negative: Mitt Romney's vocal distaste for Bernanke and his policies, which have provided 15 trillion-odd reasons why the stock market isn't much lower (this is not a natural tape given the intervention).
I'm a card-carrying free-market guy so don't shoot the messenger. And there's no guarantee that Big Ben will opt-in to another term regardless of who wins the election. It's a pretty thankless job, as most jobs are these days; I would imagine that grading papers, smoking a pipe, and posturing theses is an attractive alternative to being in a venomous bull's eye.
Meanwhile, a biting reality is starting to set in on the east coast. For those of us without power—1.35 million all told—it's not about the haves or the have nots, our next president, or venting at the utilities; it's about preparing for the nor'easter that is barreling up the coast.
While commuting this morning on the Long Island Railroad—in between the screaming, yelling, and yes, actual fights—I read an interesting article in the Wall Street Journal.
"Sandy has done what Occupy Wall Street tried and failed to do," says a person said to be a fixture at high-end benefit galas. "It's made people think about the people who don't have what I have."
That's true, to a point. Once upon a time, immediately following 9/11, Wall Street banks helped Wall Street banks, arm-in-arm, side-by-side, reeling from unfathomable devastation until a more provocative motivator emerged: Money.
History may not repeat, but it will likely rhyme. Hopefully we'll carry forward some empathy, understanding, and appreciation of our fellow human beings. This isn't coming from someone on the other side of the tracks (my home is currently a "have not"); I've been highlighting this societal chasm long before it rose to the mainstream consciousness.
There are a lot of good people out there—I know folks who dutifully trained for the New York City Marathon for more than a year and rather than lamenting its cancellation (which was the right decision), they spent Sunday in Long Beach, helping people who lost everything find something, maybe even a glimmer of hope.
That human spirit will save this country; it will take time, patience, perseverance, and fortitude, but it will get better out there; you have my word on that.
As traders, the destination we arrive at pales in comparison to the path we take to get there and therein lies our task at hand, for those who roll that way.
- Despite the early traction in futures, US equities are at an inflection point through a technical lens; the S&P (INDEXSP:.INX) is churning under resistance (negative) while the NDX (INDEXNASDAQ:NDX) has tested the 200-day eight times (and trying to hold the line).
All the while, we're seeing lower highs in the banks (BKX (INDEXDJX:BKX) at the 50-day), the Russell 2000 ((NYSEARCA:IWM) at the 200-day), and the semiconductors (NYSEARCA:SOX), all of which are negative patterns, but not omniscient in their predictive powers.
My friends down south tell me, "It's not the first seven days without power that are tough to stomach; it's the second seven days.” True dat.
If there are all sorts of legal wrangling stemming from the election, it’s hard to imagine that uncertainty would be positive for the stock market, particularly with the fiscal cliff on deck.
Remember when we asserted Why Apple Is the Most Important Stock in the World? We would be wise to note that gravity has pulled Apple (NASDAQ:AAPL) to the 200-day at AAPL 591, and that remains a level to monitor as a forward tell. Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) remain other "performance anxiety" proxies.
Other tells include our financial proxies---Goldman Sachs (NYSE:GS), Bank America (NYSE:BAC), and JPMorgan (NYSE:JPM)--as they encapsulate our finance-based, derivative-laced global economy. Their overseas brethren—Deutsche Bank (NYSE:DB), and Barclays (NYSE:BCS)—can be used to take the temperature of European (Greek) concerns.
If ever there was a moment that defined the dichotomy between being a professional bachelor in a rent-stabilized NYC apartment vs. being a married father of three in a powerless suburban home in front of a storm, this would be it.
Am I ready, Champ? I’ve been ready for this my whole life.
One month until Festivus! If you love live music—three rock bands—all-you-can-eat BBQ, top-shelf liquor, helping kids, and vibing with 500 folks that represent the finest human capital in finance and financial media, this has your name written all over it. We'll kick this year's event off by ringing the bell at the NYSE so please join us, and help spread the philanthropic word.
- Take a deep breath, remember our Ten Trading Commandments, and be yourself; no matter what happens, they can't take that away from you!
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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