REPUBLICANS BUYING STOCK!
Good morning Stocksters.... I have a feeling now that a tradable bottom is in, Republicans will start buying stock like mad in an effort to goose the market up so MCain has half a chance.
This two week period should be UP. Followed by a disaster laden 2nd half of November that folks will blaim Obama for. Then starting Dec 2nd a HUGE RUN into the end of the year; 14% is my guess in a month.
Folks will then turn around and talk about the Obama Rally, but politics will not really be the source of the down or the up- the forced selling of hedgies and mutual funds will abate Dec 1. The initial round has abated NOW for hedgies but is still going on in mutual funds. When you see big downticks at the end of the day- that is mutual funds meeting daily redemptions. The most favored stocks by Hedge Funds however have already been sold out. Their selling will pick up in force again soon I imagine as the weak ones go under at end of year... their window for redemptions will close Dec 1... and that along with a lack of selling from the now sold out mutual funds will lead to a bix x-Mas rally. Good feelings around Decemeber MIGHT rub off on some Christmas retail assumptions which are below low right now, so as stupid as it sounds I will begin drawing up a list of some retail names for Dec. 2.
Investors pulled $43 billion out of hedge funds in September. this data from TrimTabs Investment Research was to be sent to clients late yesterday -
Hedge funds are working to prevent far bigger redemptions by the end of the year, when many funds give investors a chance to take out money.
So it is to their benefit now to slow the selling and start the buying. A higher market will = less redemptions. Despite this, october will show more redemptions... that's why there is this little swet spot now for two weeks when I think it is to everyone's advantage except Obama that the market go UP>
Redemptions alone would not be a problem save for the fact that the hedgies are so leveraged; JP Morgan estimates that every $150 in hedge Fund redemptions translates into $400 worth of portfolio liquidation! bastards!
So to those who do not like to predict I say, enjoy a Republican led spending spree the next two weeks as we get close to the election... then book some gains for a messy last two weeks of Nov.... and then go all in Dec 1 or a few days before or after. ~ stoney