The Presidential Cycle

Despite the market seemed overextended and overbought, today we get another broad based green gap and run day.

Well, in addition to the Fed’s QE2 pumping $8-$9B per day through mid year, there is another power force at play – the presidential cycle.  President Obama’s in his state of the union speech just 2 weeks ago even stated that “the stock market is roaring” during the 1st minute of his address.  Stock market IS the economy and the incumbents will do everything within their power to prop up the stock market and thus prime the economy just in time for the next re-election.

Michael Pitre posted this S&P monthly chart which puts one in perspective.  The stock market has a long way to go yet!!!

With the trend, the fed, the presidential cycle, and even the SI all pointing up, why be an hard-a$$ and go short?   Buy on any dip — if the market allows the dip!!

 

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