The Obama Trade

CNBC has coined a name for the market action in which the market ignores bad economic data and moves higher on hope of a change. How long can this trade continue and will it survive until change can actually be put in place?

That is the big question.  The biggest obstacle to it will be if a combination of Republicans and Blue Dog Democrats join forces and try to sabotage the new movement.  It will take some time to see if there is a move in that direction, but in any case if it does materialize that will be biggest reason to get bearish on the markets again and start looking for 600 on the S&P. 

In the mean time the market basis the S&P has run up to the bottom-side of the S&P 900 area.  It will take positive action on the auto situation before the market can push through.  In the meantime we are holding our positions and watching.

8:04 AM CST