As the DJIA closes on Election Day a scant 200 points BELOW the Labor Day level (history shows a 91% chance of Kerry being elected later this evening), we await the returns. In a Contrarian victory, after pundits have recommended Large Cap, Dividend-Paying stocks all year, we find the DJIA, SPX and Nasdaq all down YTD, with Transports, Utilities, S&P Small and Mid- Cap Indicies at multi-year record highs. Although Seasonality points to higher market levels at year-end ( mutual funds have dumped their losers through October), there are a couple clouds on the horizon: the Nova/Ursa ratio climbed above 20 for the first time in several months to 23; the Public/Specialist shorting number at 2.34 is near a 5-year high; and the CBOE Eauity put/call ratio dropped dramatically from a Bullish 77 last week to 59. Short interest still remains large on the SWH software holder, the Energy XLE spider, and the TLT 20-year Treasury. We now await the FOMC results on November 10 (probably the 4th rate hike), then the typical upwave short term and downwave intermediate thereafter.
With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding.
For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance
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ELECTILE DYSFUNCTION
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