We have seen the Market Lows through the next Election

The employment numbers today and the macro technical market indicators point to a high probability that the stock market has seen it’s lows through the 2012 election. 

Maybe it is the lunar cycle, but even Alan Greenspan was rather clear today on CNBC talking about getting rid of the Bush tax cuts and applying Simpson – Bowles recommendation.  Both would be good steps to get deficit issues headed in the right direction.  Peter Orszag on that same show had some good ideas on housing in terms of initiatives to give tax incentives for capital to be applied to distressed housing and moving it into the rental space.  Now all we need is to make some headway on getting employment even more robust.

Two big and important things that happened this past summer are:

1) It is obvious that the actions of the House Republicans in August set off the sell off in the markets and illustrates how important rational dialogue versus grand standing is to our country’s health.

2) The fact that Bernanke didn’t do a QE3 has forced the funny money out of the markets.

Now for the markets

Basis the S&P 500, the low is in and we are headed for the 1277 area over the next three months.  The few investors who were buyers this past Tuesday are talking about selling out today on the rally.  If you are a quick trader that is probably ok, however the 1130 macro support area is not that far down and is our reference point for buying.

Commodities as mentioned yesterday are cheap enough but one has to keep in mind that a good portion of their high levels over the past 18 months was based on funny money.  Gold is still waiting for the end of the world and Greece is its last hope.  It will be disappointed.

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