Economy and Elections – What will happen to the Stock Market?

November 1, 2010 Let us take a moment and an outlook to what we see and what we expect:

Today’s News

• Increased Chinese triggered by expansion of infrastructure projects: government spending or deficit spending.
• The ISM Report (Institute for Supply Management) is showing that economic activity in the U.S. manufacturing sector unexpectedly expanded at an accelerated rate in the month of October to 56.9 in October from 54.4 in September. A growth that is in the range of any standard deviation and with that not much progress.
• The Commerce Department reported that construction spending increased by 0.5 percent in September following a revised 0.2 percent decrease in August. Based on deficit spending.
• The report also revealed that personal spending increased by 0.2 percent in September after rising by a revised 0.5 percent in the previous month. September's increase was short of expectations for a 0.4 percent increase.

Our Validity Check

At times with where little increases in the range of a calculation default lead to enthusiasm, we are looking at an index that tells us a comparison of bulk good shipped and booked, which usually gives an indication of what is coming in the next 3 months.

Why?

Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food, the index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity.

What do we see?

We are sloping down, which is not speaking for a great economic outlook.

As a result, be the elections how they are, the economy is still fragile and we are getting prepared for a market retracement in the near future and get ready for it:

How do we get ready:

Short term we are bullish:

Long Term we are:

- Not holding long term engagements in Equities

- Trading the Futures markets with defined stops

- Applying option income strategies above the highs of the indexes

- Trading currencies that will go with or against the stock market trend

You learn all this at: http://NeverLossTrading.com