Mid-term elections and why politics will interfere with stocks

November will host mid-term elections, it looks like Republicans are in trouble. This will directly effect stocks, why? Majority of the media outlets have not been kind when reporting about the economy. We have unemployment below 5%, worker productivity is at all time highs, and GDP growth is healthy. What is there not too like? To the liberal media outlets, the jobs that are being created are of lower quality, although income is rising a faster pace the inflation. Things just don’t add up with the media. Where does this bring us…

We’ll probably see a fools rally here until July*. Mid-term election adds will begin to run…with republicans on the run democrats will start to seize the opportunity to tell US how bad EVERYTHING IS! The unfortunate outcome will be that money managers will buy into this BS and sell stocks. They’ll sell ‘em down right into November…September and October are seasonally horrible months for the market anyway…throw in some hurricanes for the hell of it and that spells CORRECTION…not crash…CORRECTION. After the November elections regardless of who gets into office the negativity spewing from media outlets will suddenly stop and the CROWD will begin to think rationally again.

WHAT DO WE DO??? We wait, plain and simply. The massive locomotive that this will be will clean a lot of newbie’s clocks! STAY AWAY! What I will and what you will be doing is watching for new market leaders, those who are forming tight bases, cup and tight handles, waiting for the market to confirm breakouts. We’ll hop on the BIG WAVE and let those new emerging market leaders ride.

Until this time, we wait patiently studying Mr. Market.

MktSpec

*Lack of new market leadership during this attempted rally is telling me that this will ultimately fail.