It is no secret that during an election year the market usually finishes higher. This year we have a president that is more determined than ever to “buy” the election.
But despite all of the attempts to prop the market up we find ourselves only mildly higher for the year. The most recent “stimulus”, QE3, is short-lived so far. The market made one minor move on the announcement day and since then has been back to normal.
There are several reasons why this stimulus has been ineffective, but the primary reason I believe it will continue to make little or no difference in the markets is
TRUST. The previous stimulus plans simply didn’t work as expected and they were much more direct then QE3. So why should anyone expect QE3 to work when the previous attempts failed?
The world is in turmoil so it is very difficult to identify the exact reasons underlying why the market does what it does sometimes, but it is clear that QE3 has not had the desired effect thus far.
It bears stating that only a few election years have finished lower on the year, the most recent being 2008. That said, I don’t believe you
can blindly place trades based on historical election year patterns, given that we are in a completely different world with dynamics that did not exist previously. On a side note, it is looking more and more like AAPL has seen its peak.
Karson Keith
Karson Keith’s interest in trading started at a very young age. By age 13, he began trading and managing his father’s money. Today, his passion for trading has attracted a following of like-minded income traders seeking his help in taking their trading to the next level.
Karson specializes in cutting-edge options strategies, volatile markets and small trading accounts. He not only has single-handedly grown several small accounts into large portfolio margin accounts within just a few months, but he has also helped countless people achieve the same results.