With so many people still fearful how can this possibly be a final top?
Gridlock may prove better for markets than if
Republicans had got another clean sweep.
Gavekal
I think it’s to earlier to say what is going to
happen. The markets are in a delicate position more red is very dangerous. The benign
scenario is that we bottomed 28 October and we go up from here. Often markets
don’t like uncertain and the elections are behind us, it really doesn’t matter
who wins just the fact that it’s over is a plus. The coast is not clear yet. My scenario is still a melt up
in 2019 but I keep my eyes open. If it goes up I buy if it goes down I sell.
I saw a study ( stat ) that the market goes up much
more in the days congress is not in business than the days they legislate. The markets
don’t like new laws . the best would be for politicians to stay still and
quiet.
Singer found
that in aggregate, the S&P 500 Index
performs better on days both houses of Congress are out of session versus days
when both houses of Congress are in session. There is also a decrease in
volatility as measured by standard deviation.[1]
Congressional
effect management found that the S&P 500 Index had a daily annualized price
appreciation of 0.31% on days Congress was In session from January 1, 1965 to
December 31, 2008. Over that same time span there was a 16.15% annualized price
gain on trading days Congress was Out of session.
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