Back in October (on the 29th, at 1:34 pm PST, to be precise) I made the following prediction via a twitter feed (slang4201):
"Expecting 12-18% pop in the market between now and next wed if Obama wins. 3-7% on a McCain win. After that, 20% drop by Mar 1 for either. "

Let's see how it is panning out so far, shall we?

On October 29, 2008 - the day I made my prediction - the S&P 500 closed at 930.09.

On the Wednesday following the inauguration (November 5), the S&P opened at 1005.75: an increase of 8.1% Not quite the pop I anticipated with an Obama victory, but still not too shabby for a week's gain.

Continuing on...

Today, January 20, 2009, the S&P closed at 805.22, reflecting a 15.5% drop from October 29, and a 24.9% (shall we just call it 25%) drop from the high open on November 5.

O_O

With the news coming out just getting <sarcasm> better and better </sarcasm>, I think I may have to revise my original prediction for March 1.

Let's see... 805 now, State Street just now releasing information relating to their financial shenanigans, Bank of America in deep doo-doo, Wells Fargo so in debt it's not funny... Looks like Oil company windfall profits are about to get taken away. That should provide some additional income into the coffers of the Treasury, but it will decrease the stock values.

Shall we call 650 in the S&P by March 1? When we hit that, we may see some bear market rallies that can make the savvy investor some lucre, but be cautious, since we aren't at the bottom yet.

Those who called the bottom of the DEPRESSION  - yes, I used the word - recently (I'm looking at you Scott Adams) are deluding yourselves. It will take a year to 18 months just to get all the bad news out. Only then can we start to recover.

    Despite the recent gains in the market since the lows in late October and early November, I don't see any good news coming out of the big retail season, nor anything good in the jobs market or real estate, or, for that matter any aspect of the US economy. 

    I am no money manager (except for my household finances), nor am I a trained economist, financial advisor or affiliated with any particular aspect of the financial community. I am, however, interested in the market, how it functions, and how best to profit from it.

    I am still learning to read candlesticks, waves and other patterns in the market, and am listening to others in the financial fields as to what they think is going on. However, I have a hard time believing a lot of the talking heads on TV consistently telling us that the lows have been reached and the economy is certainly on the rebound and that we should be keeping our money where it is.


   Each of the last three week's closing prices on SPY have been lower than the previous one - a strong bear indicator. This has been the pattern over the last month despite the government's attempts to reinvigorate the economy with interest rate cuts.


    Unfortunately, there isn't much more in the government's arsenal at the moment they can use to give the economy a kick in the shorts, and with that wad shot, what's left? Not much, with the exception of real economic change - and that's not something that can happen quickly. I see a FDR-esque Obama-deal coming. Combine that with realistic spending and saving habits of Americans and letting archaic businesses go the way of the dodo, things may come around in a year or so.


   As for bailing out various industries that are "too big to fail," if they are too big to fail, then they should be a part of the government or at the very least subject to intense regulation and scrutiny. The bailout should be a buyout where the taxpayers become the owners and any profits are provided back to them. In the process, all existing contracts - including those with the labor unions - become null and void and subject to immediate renegotiation. Executives are paid at the rate of a government civil servant. If they leave, so what? What exceptional abilities did they show when they were busy driving the company into the ground, while collecting obscene bonuses and "retention incentives" to stay at their jobs? I could do the job at less than half the price. Any takers?