This is by far the worst post election stock market in history. The good news is it finally looks like everyone is running for the doors.
Panic? Not really, not yet.
Will there be panic? I don’t think so. I think much of what is happening has little to do with panic selling. Much of the sell off is very organized. For example, no triggers to halt trading have been met and we only came close one. So, it isn’t panic selling or automatic program selling. It doesn’t even look like much of it is to cover margin calls (that happened months ago). The volume is still anemic too.
But, there is little to no good news for the market to grasp.
Unemployment is rising. We are either facing higher than expected inflation or the real prospect of deflation, depending upon what expert speaks at any given moment. Everyone expects taxes on businesses and the wealthy to increase next year. Many expect the job losses to accelerate depending upon the details of the expected tax plans next year.
There is one man who can turn the market around, at least temporarily. That man is Barack Obama.
No, I have not drunk the Obama Kool-aide, let me explain. If he were to call a news conference today, tomorrow, whenever and said he was abandoning his plans to raise taxes as long as the economy was struggling the way it is, the markets would react positively.
However, since that is just not going to happen the market will continue on the path it is on and the question is not if we will see a sub 7000 DOW, the question is when. Then the followup question will be how much below 7000 will it go?
Tags: Dow, PEBO, Stock Market
