Stock Market Currently Signaling an Obama Victory

Pinnacle Digest writes: In Ben Bernanke’s speech last week, he chose the perfect words to keep the market together without ruffling the feathers of politicians.


In his latest article, Gary Tanashian explains that the politics involved in the Fed’s decisions, originating from the Republicans sounding off about a gold standard and potentially firing Bernanke, were too influential for ‘Helicopter Ben’ to make a significant play and implement further monetary easing.


With that stated, Bernanke knew that he had to reassure the markets yet again, but do so without injecting liquidity. And in Tanashian’s words “ Ben Bernanke walked a middle ground on Friday, giving the market – especially the precious metals segment of it – enough of what it wanted to hear without actually having to announce a policy move. The implication is that bullish price activity can continue and if it doesn’t – especially if markets decline along side a more acutely decelerating economy, the Fed stands ready, willing and able to attempt to inflate the system.”


Election Cycle


With only two months until the election in the US, doomsayers are predicting the worst for the markets and economy once it is complete. Gary Tanashian isn’t making any election predictions, but he is looking at the market technical data and providing some possible outcomes.


According to Tanashian, the market’s reaction on Friday to Bernanke’s speech suggests that Obama will win the upcoming election. He explains that when the markets rally in an accelerated manner in August (he provides charting for reference) during an election year, the incumbent is expected to win. He also explains that if an incumbent is expected to lose, the market typically dives into a significant correction by early September.


Some may argue the technical data, given that Wall Street clearly wants Romney to win, but history has a way of repeating itself and Tanashian’s historical analyses paints a clear picture.


So, this week in the market and the early part of next will be very telling (using historical analyses) of what the markets will do until election time. As of now, they are predicting an Obama victory, but the next week of activity will either confirm this by the market continuing its upward trend, or lean towards a Romney victory but starting a very steep decline.


Click here to read Gary Tanashian’s full article on the market’s ability to predict the winner of the US Presidential Election.