2008 Polaris Prize winner Caribou (f.k.a. Manitoba) - Melody Day
Sweet psychedelic electronic music layered with guitars, soft tenor vocals, and booming percussion. Celebratory music for the the Wednesday after Election Day.
How did the market react to Obama's victory?
According to the AP, Wall Street had a temper tantrum:
NEW YORK (AP) -- A case of post-election nerves has sent stocks plunging as investors, again anxious about a recession, are wondering what impact a Barack Obama presidency will have on business and the overall economy. Volatility has returned on Wall Street, with the Dow Jones industrials falling 486 points to the 9,139 level, and all the major indexes tumbling more than 5 percent.
The market was expected to give back some gains after a six-day runup that lifted the Standard & Poor's 500 index more than 18 percent. But investors lost some of their confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings, and there was more late-day selling by hedge funds.
Analysts said the market is also growing anxious about whom Obama selects as the next Treasury Secretary, as well as whom he picks for other Cabinet positions.
The second paragraph is key--the S&P had been on a tear, climbing from 845 to 1007 over six days until Obama became President-elect, which apparently drove the S&P down to 952.
Really, did Obama cause this? Or was it that the technically overbought market, perhaps a bear-market sucker's rally, reverted to its long-term downward trend?
I vote for correlation without causation, i.e. reversion to the trend.
In the spirit of the market's overbought status, I picked up additional shares of FXP, the ultra-short China ETF, at $79.25, bringing up the cost basis of my position to $78.975.
FXP should climb considerably higher tomorrow, since as I'm writing this, the Hang Seng is down nearly 6.5%. In after hours trading, FXP was already trading for nearly $90-a-share.
My short-term price target for FXP is ~$120, although FXP has traded as high as $200-a-share over the last month. This price target is when I'll start contemplating unloading my position.