Post Election Apocalypse

 Today had several things going against it: another European crisis in the making, another threatened U.S. downgrade, and the re-election of the most economically unfriendly administration in U.S. history, and down we went. Support is now broken, volume was high,a nd we are threatening the 200dma. In 2009, Barack Obama inherited a bear market, and immediately blamed his predecessor. Next year he may well inherit another one, and this time, he is to blame. His administration had a historic chance to put the U.S. economy back into balance, and he blew it, and now gets another 4 years to deal with the consequences of his own actions. He may yet regret winning.

 Not much doubt about it, the Nasdaq is now in a bear market. This will have a few support levels as it approached the June low, but if volume stays like this, that support will have trouble holding.

 The NYSE composite, for whatever reason, is now relatively strong, after months of being horribly weak. Despite the relative strength, it also kissed support goodbye today, and whiel it came off the bottom fairly nicely, is still looking like a test of the 300dma is in the cards.

Here are the sectors ranked by RSI. XLI just beat our XLY at the close for first place. Unbelievably, XLU went from first to last in one week.

 XLI and XLY ghave very similar looking charts, with sharply rising price relative lines. They are both holding up quite well right now, and it might pay to delve into these and find out which stocks are holding thee together.

XLU has had a sudden, and surprising, crash, for reasons I am not aware of. Normally I would sayu that the market is about to rally big, but with the market as weak as it is now, this is absolutely not a good sign. When ven defensive sectors are selling off, there are some real danger signs in this market, and we may be on the verge of a major move down.

The election is over, and so may be the world as we have known it for the last couple of decades or so. I have no hard feelings about Obama (unlike the Republicans, who I am seriously pissed off at), and wish him well, but i am afraid we might be living in a completely different world 4 years from now.

I will have the new highs update shortly.

2012-11-07 18:00:11

Source: http://samuraitrader.blogspot.com/2012/11/post-election-apocalypse.html