On the web since 1997
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On the web since 1997 |
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Exit Polls Ruin RunLuke Hodgens / Powerhouse Profits -- Exit Polls Ruin RunIt's really amazing what a little bit of unfounded data can do to the market. Stocks opened up Tuesday on a very positive note as traders felt Bush had the election in the bag. The Dow took off out of the gate and ran up 78 points, the NASDAQ shot up 23 points and the S&P 500 launched out of the gait gaining 10. The market was finally getting over its year long hang over as uncertainty over the presidential election turned into what traders felt was a sure win for Bush - then the exit poll data came out. I've been writing extensively about how the market would react to a victory by either candidate, in fact, the November issue of Powerhouse Profits delves deep into the ramifications of a Kerry or Bush victory. Once again, I was right on the mark. I showed members exactly what was going to happen when Bush was declared the winner - the beginning of a year end Bull Market. Conversely, I showed members that a Kerry win would cause stocks to plummet (you can read more about this at Powerhouseprofits.net). The market was gearing up for a Bush win the week prior to Election Day. Almost every poll showed Bush ahead, and by a decent margin at that. When the sun came up on Election Day, traders were secure in their bets. The market began to rally behind Bush, until 2:30 that is. The False Data Just after 2:30pm, the first round of exit poll data was released. The numbers immediately startled the market. The data showed Kerry with a huge lead in the battleground states of Florida, Ohio and Pennsylvania. Shock set into traders' minds they thought they made the wrong bet. All major averages began a fast and furious sell off. The Dow dropped 100 points from its earlier high, the NASDAQ sunk 23 points and the S&P 500 fell by 10. The market was preparing for a Kerry victory by tanking. At this point, the market was well prepared to drop down below the year long trading channel. Why would the market sell off even if the uncertainty of the election was wiped out by this data? Capital flow. Period! Kerry's so called plan included revising the old dividend tax system and rolling back the capital gains tax to pre-Bush levels. This meant that billions of dollars would be sucked from investments, AKA people's nest eggs, and end up in the pocket of Kerry's Uncle Sam. I, for one was preparing for a crash…even though our portfolio is fool proof. When the market closed, it was still evident that the exit poll data would come to fruition. Traders went to bed with dreams of selling. But, thankfully, the data was dead wrong. Once the market saw the raw numbers coming in it breathed a sigh of relief, shook off the hangover and prepared for the Bull Run. Folks, get ready for some strong gains. Luke Hodgens is the editor of |
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