tirsdag den 4. november 2008

One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn't do.

One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn't do.
Henry Ford

Dear Investor

Henry Ford qoute adress' the challenges of the new President of the US of A; President Obama.

President Obama is in place and with him the highest hopes since Kenney took office - both seemed(s) able and willing to inspire beyond the "standard protocol" of non-sense which politicians across the world spills on a daily basis.

I am, despite many of the readers seems to think otherwise, totally agnostic on politics - I merely learned long time ago that they are "destroyers of wealth" rather than visionaries and solution oriented people.

I am absolutely sure they have a firm belief in what they are doing and that they are doing so with the best of intentions, but history clearly shows "political vacuums", and here I am not talking about the empty space in their heads, but of periods where they are stalled have lower budget deficits and higher growth.

From this perspective the new Congress with 56-58 Democratic Senators and President O in the White House looks "dangerous" for the investors as we would expect all the normal Keynesian tools to come of the shelfs...... but is there hope for real change?

I hope so, I am one of the biggest fans of the US, and I want US to regain its strength, for the average American to not lose his job and for US to take a better and more rational place on the world scene again. Having read this blog before I am sure you all know however what I always says on hope: It belongs in Church on Sundays - we need to judge the new Congress and the new President on what they do and not what they say.

I expect the election on its own to have a neutral impact on the stock market for the balance of 2008 as President O gets his team in place - tries to pre-announce his policies and make himself comfortable in the Oval Office.

Data supports this view:

In "Presidential Cycle," Ned Davis Research notes the S&P 500 posted its weakest returns in the first year of the four-year election cycle. Since 1900, stocks have gained just 3.4% on average in the post-election year, compared with gains of 4.0% in the midterm year, 11.3% in the pre-election year and 9.5% in an election year.
Even after Tuesday's 305-point surge to 9625 in the biggest Election Day rally ever, the Dow is down 27.4% this year. How have stocks fared from Election Day to year's end? When a Democrat wins, stocks have lost 1%, while rising 4% if a Republican wins, Bespoke Investment Group says.


Another point is that whatever ones believe on politics - President O represent a new era and as such we need to make some changes to our projected future:


A few links on the election results:




Short-term there may be some impact for the day traders basing their position on "hope" and with the recent momentum of the market we maintain high odds for 1050/70 test - it seems for now that reallocation, "behind on benchmark" managers trying to get back to their equity weights - while on the other hand incoming data & redemption still offers the market its gravity on the downside. Mildly bullish - based on market being oversold but not yet undervalued.

The long EURCHF work as a charm yesterday we took profit - and awaits further "clarity" on risk - continue to moniotor VIX's 21-days moving average as lead indicator - while below its all go, if it turns back up there could be time for some sideways action...... JPY risk reversals another key indicator as they remain extremely bullish... I.e: risk aversion.

I am off to Dubai this morning - I will try to blog live from the Dessert in the meantime watch the political game for what it is: Politics is Hollywood for the ugly (Ronald Reagan)

Safe trading


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