Can the stock market rally last through the 2012 election?

Market Pulse: August 13


What we have been reading about in the press for weeks is the on-again/off-again speculation on Fed stimulus. Increased speculation brings the markets up. Why? The markets would like to see QE3. But think about this, as long as the market responds favorably to just talk, the Fed will keep on talking. When talking does not work anymore, we will see stimulus put into action.

If we see the markets drop too much before the election, no doubt QE3 will be announced pushing the market up. The markets do not like uncertainty. If polls start showing a closer election, then the uncertainty of who will be president will take its toll. But watch the Fed, too great a toll hello QE3.

Of course Big Money also will have a major say in the direction of the S&P. Will we see continued buying and selling, or the start of liquidation? We will have to wait until Friday to find out. Have a prosperous trading week. 


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