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Stock Market Strategy

September 29, 2006

No roses, no champagne, no bananas! The headlines read, “The Dow that cried wolf“. After closing UP the first four days of the week, Friday was a downer. And the markets closed out the month of September, and the third quarter very quietly. So when everyone returns Monday, October 2nd, just a month away from the elections, how to play the stock market becomes even more difficult.

Who Wants Cheaper Auto Insurance?

The US Stock market has had a great run for the year. Has it run out of gas? Could it be stopped just before the elections? Wouldn’t any fall be better for Bush after November 7th? And does the administration have any thing they can do to manipulate the markets until then?

Duh!

The stock market today is long in the tooth with increasing raisks gaining momentum. Some say that the release of Ayman al-Zawahris’ latest video did the market in. Obviously any potential mention of a terror threat can throw cold water on a party.

“Why don’t you tell them how many million citizens of America and its allies you intend to kill in search of the imaginary victory and in breathless pursuit of the mirage towards which you are driving your people’s sons in order increase your profits?” al-Zawahri said in a portion of the video released by the Virginia-based IntelCenter.

But there was other home grown economic news that didn’t sit well with investors. Another round of possible interest rate hike would have to be the major stumbling block to investors. Crude oil prices were back up over $62 as Chavez and Nigeria threatened to cut back production regardless of what OPEC did. I doubt it!

But with the many risks increasing their potential for manifesting sooner, rather than later, investors decided that any new record on the Dow could wait a day, a week, a month. Champagne doesn’t spoil anyway. But, you’ll have to eat the bananas, and buy new roses. :-)

Written by Ernie · Filed Under Daily Commentary 

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