The polls indicate a close race, scary in the sense that the outcome may not be clear, that the vote count is challenged in New Jersey, New York, or Pennsylvania due to makeshift efforts to accommodate voters who are without power, a home, transportation, etc. due to Sandy.
The is no Marquess of Queensbury Rule in Politics. Boxing has a lot in common with politics – to win by knock out, a unanimous or a split decision, or by fixing the fight. The difference is, no hitting below the belt and we have had so much of that this time, it is a disgrace for the political parties and the people who tolerate and feed on it. That isn’t who we are, but then maybe I just don’t get it.
If an outcome is uncertain that is just another uncertainty the market has to deal with, that is another wedge driven between one American and another, prolonging the time where we bond together and address the challenges facing us.
A disputed outcome would hammer stock prices.
Investor’s first read – an edge before the market opens
S&P 500: 1417.26
Nasdaq Comp.: 2999.66
Russell 2000: 819.54
(Tuesday, November 6, 2012 (8:58 a.m.)
Both DJIA and S&P hit a wall at my resistance level yesterday ( DJIA 13,148 (S&P 500: 1419) then sold off a bit at the close.
Today, stock-index futures indicate a positive, though guarded open, reflecting the hope the electioneering is coming to an end. Resistance today starts at DJIA 13,176 (S&P 500: 1424).
My message is the same today – “Rallies From Here Are Suspect !”
The market also bounced off my support levels yesterday (DJIA: 13,040, S&P 500: 1403), giving short-term credibility to them , but only short-term.
A break below these support levels sets the stage for a nasty tumble to 12, 735 (S&P 500: 1376) near-term. Those are preliminary, subject to change.
I see a buying opportunity shaping up, most likely after a choppy downtrend (plunge-rally-plunge-rally-plunge).
The 3.5% drop since October 18 discounts some of the uncertainties facing investors before year-end.
The one colossal negative is the fiscal cliff. If for some reason Congress gives us a reason to believe they can come together and find a reasonable bipartisan solution to the fiscal cliff, all bets are off – the market is going NORTH ! .
FACEBOOK (FB – $21.25): No change. FB is stabilizing above $21.00. Break above $21.55 sets stage for rise to $22.45. FB’s ability to move up is complicated by millions of shares coming on the market that could be sold , shares that were in “lock-up” from its IPO. On Monday 234 million shares became eligible for sale, on Nov. 14,777 million shares become eligible and on Dec. 14 another 156 million shares. Yesterday’s volume was 32 million shares.
I don’t own, nor have I ever owned FB. Generally, I don’t recommend or comment on individual stocks. I started covering FB technically after its IPO because on May 21, I felt at $34 it was very vulnerable in face of all the misunderstanding and hype. I warned of a drop to $24-26, which it did shortly thereafter. Following a rally back into the 30s, FB dropped into the low 20s where on August 2, I forecast a low of $16.88. On September 4, it hit $17.55, its low since its IPO at $38. I’ll continue technical coverage for a while to accommodate readers, but think my objective here has been accomplished.
*Stock Trader’s Almanac: This is a “must own” publication, loaded with daily, weekly, monthly savvy. It is “the source” for strategies, seasonalities, recurring events, useful stats. Published annually, I have used it every year since 1968. Nothing compares !
The writer of Investor’s first read, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.