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Tuesday, November 4, 2008

How The Election Affects Index Trading

The market was choppy, and fairly narrow on Monday (compared to the HUGE swings we have been seeing recently). We sort of expected that on election week. However, we never forget our number 1 rule that ANYTHING can happen at ANYTIME.

We do expect the market to be similar today as investors try to get a feel on who the next president will be, and how that will effect the markets. The early news shows that the International markets are all excited at the thought of an Obama presidency.

You no doubt have heard analyst claiming that if Obama is elected the capital gains tax will go up, and investors won't like that. However, we have to remember that until January 20th he would just be president-elect and not the Pres.

Even when the new president takes office, he is not going to be able to raise ANY tax immediately. We need to also remember that politicians rarely do all they say they will do.

How does all this effect us as daytraders or Index Traders? Not much. We are just going to keep looking for those simple set ups that tell us a good move may be getting ready to happen Right Now! Yes, it may be narrow and ugly today -being election day, but good moves are sure to follow. That will be true no matter who the president or the president-elect is!

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