WASHINGTON, September 19, 2012 – The stock market has been more than usually strange-acting this week, although on the other hand, that seems to be same-old, same-old, doesn’t it? It’s options expiration week, meaning that the week should generally end up somewhat, as all the computers on Wall Street dash about to rob surviving individual investors and stodgy 401(k) plans of whatever money they’ve got left. That said, this week has been pretty boring thus far and we could use a little more definition here.
That said, maybe we’d best not wish for edgier action so much. The market, by many accounts, is overbought, juiced as it has been by Uncle Ben’s Converted QE program. So it should really go down for a bit, at least, to clear the overbought situation. And it actually has been negative to wimpy thus far, with even today’s mini-rally stalling at midday. The usual pattern of these weeks is, in fact, to mope around in red ink on Monday and Tuesday, get juiced to the upside on Wednesday and/or Thursday, and then resolve matters one way or the other on Friday, depending on what real or imagined horrors might await on non-tradable Saturdays and Sundays.
But today is wimpy again, with the market pulling back from some early euphoria about a sales pickup in the realm of previously-owned homes. Mild optimism there.
But we suspect that the market will still wander around for the rest of the week until and unless the Obama Administration’s feckless Middle East non-policy bears the bitter fruit that it seems about to bear. Markets, too, don’t know what to do with regard to the upcoming elections. It’s a certainty at this point that the House will remain in Republican hands.
But the Senate is still iffy, given the near impossibility of dislodging bigwig-owned and operated incumbents from behind the wheels of their redistribution streams. And the White House is anybody’s guess.
We were prepared to go out on a limb a couple of weeks ago and predict something of a Romney landslide, but it’s hard to say. The left-wing media machine has been telling everyone to put a fork in Romney, citing ridiculously gamed polling data that consistently underreport Republican participation, making the allegedly bigger and bigger tilts towards Obama quite unreliable.
Meanwhile, for the size of its campaign war chest, the Romney folks seem to be relatively quiet on the ad front, unless they’re doing something else we don’t understand, like boots-on-the-ground in Ohio.
At the same time, everything Romney says is a “gaffe” that makes him more “gaffe prone” according to a media that no longer seems interested in reporting actual facts. Apparently they can make a lot more money selling left-wing propaganda to the masses, so that’s what they do now, bristling at any Neanderthal that accuses them of being hacks. Which they are.
Anyhow, a Romney “gaffe” is apparently defined as a remark or speech in which the candidate explains an actual, objective truth, like the recent flap over the give-or-take 47% of takers who will always vote to take more and will thus never vote for a Republican candidate anyway. It’s more or less true, or this election wouldn’t even be close, but there you have it. It’s a “gaffe.”
Meanwhile, Obama’s past pearls of wisdom, like the “bitter clingers,” the desire to goose gasoline prices through the roof, and the latest reminders via YouTube that the President openly espoused redistribution in remarks made in the late 1990s—all these get a pass because, well, they’re not “gaffes.” And actually they aren’t, as America’s first socialist president meant every word.
In any event, we’re not just blowing off steam here, though it feels kind of good. Rather, what this impasse, this lack of a clear winner means at this point is that increasingly, investors of all stripes—even at times those rogue computers—aren’t willing to make many definitive or long-term bets on anything. For businesses, really, a clean sweep of House, Senate, and White House would be unbelievably bullish, although the market, ironically, would go down for a bit, realizing that some sense of fiscal responsibility might mean a little less in the way of dollar printing by the Fed.
But if you even believe the lying polls a little bit, what we’ll get in November instead is either a Romney presidency with Harry Reid still refusing to pass budgets in the Senate; or essentially the same cast and crew we have today with no defense against the inexorable crush of Obamacare, no budgets, and a Hugo Chavez-like president who uses “executive orders” to circumvent democracy, easily bypassing a helplessly stupid Congress that can’t get itself together enough to assert itself and its power.
So, what we get here is a perpetual meander in the market, a state only likely to be broken by something big, like Israel finally doing the right thing and obliterating Iran’s nuclear weapons program.
But meandering is far more likely at this point, which reminds me of my late mother-in-law for some reason. Mrs. Maven used to like to tell me about their family trips from Cleveland to visit relatives in Pittsburgh, traveling East on the Ohio Turnpike.
Not too far from Youngstown, they’d always cross Meander Lake, a place name that enthralled my Irish-born and bred mother-in-law, apparently. “Ah, Meander Lake!” she would predictably proclaim at each and every crossing. “What a wonderful name. It just ‘meanders.’” The kids would snicker, as there was never a conclusion to this rote observation. Nothing else ever happened, although the Maven and the Mrs. have noted the place has been re-labeled “Meander Reservoir” in recent years.
But gaze upon our photo of Meander Lake Reservoir above and think meandering thoughts. That’s what the market is doing. And it will do it unless someone or something gets feisty enough to break through the Carter-like malaise that is Great Depression II. Otherwise, we’ll be meandering here perhaps forever.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
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