Tuesday, February 2, 2010

The lowest point history.

In the second half of the 20th century, it became apparent to economists that the stock market worked in cycles and could be directly associated with presidential elections. While there are other factors that determine the rise and fall of the stock market, such as war or liquidity failure, an overwhelming pattern has emerged since 1942 and the reelection of President Roosevelt.
Features
According to statistics, outside of four occurrences since 1942, the lowest point in the performance of the stock market is during the mid-term elections. Basically, 2 years after a president takes office, the economy drops.
Significance
Politicians are fully aware of the cyclical nature of presidential elections and economic downturns. Sitting presidents can take advantage of this as long as the economy has recovered during their reelection. An opponent can take advantage if the economy is still down.
Potential
Using this knowledge of past performance, it is possible for investors to know when to limit an expanse of stock purchases. Deeper analysis by Pepperdine University shows that a person should buy on October 1 of year 2 and sell on December 31 of year 4.
Considerations
The only exceptions to the 2-year rule occurred between the periods of 1949 and 1960. This period is marked by an overwhelming increase in overall American wealth that many economist point to as a result of the post-war era.
Warning
Despite the historical evidence, it is important to make proper judgments while investing in the stock market. Not every sector of the economy rises and falls at the same time, so it is uncertain as to exactly which stocks are the most profitable.
The Dow Tuesday,2/02/10 is 13 market days to ftures/options expiry.
Nikkei future expiry:12/02/10.
Chinese New Year Holiday:14/2/10 - 16/2/10
9:30am:--Spillover bulls.
10:30am:--Early pullback to find a low.
11:30am:--After finding session high,pullback to the bull pivot.
Pending home sales in December increased 1.0% month-over-month
12:30noon:--Rebounded to another high.No sign of pulling it down to MAV support line.
Treasury Secretary Geithner testified before the Senate Finance Committee this morning on the government's fiscal 2011 budget.
1:30pm:--Breaking another high,bullish engulfing.
The President's Economic Recovery Advisory Board Paul Volcker testimony before the Senate Banking Committee.
2:30pm:--Slight pause to bull support pivot.
3:30pm:--Day's high being reached,spinning top.
4:00pm:--Mild profit taking back to bull pivot.
February bulls are trying to short-cover in this shorten month.The two advancing soldiers must proceed to the January's MAV resistance line in order to confirm its strength.
Signs of strength in the housing market pushed the Dow, a positive sign.
In a break from recent patterns, stocks that reported better earnings news Tuesday moved higher, instead of in a "sell the news" fashion. Risk assets found willing buyers Tuesday, as investors ran up the price of everything from gold and oil to wheat. Oil bubbled 3.8 percent higher to $77.23 per barrel on stronger economic data, a soft dollar and a sharp jump in gasoline futures.