The election looms large as Wall Street hovers around the flat line. The PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) trading at $65.24, +0.07 (0.11%) while the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) trades at $130.49, -0.18 (-0.14%).
As the markets continue to look at election day and hold flat, there is a worst case scenario that looms large. This worst case could create a major sell off on Wall Street if it were to come to pass and may even have a recession caused by our elected officials.
As the markets continue to look at election day and hold flat, there is a worst case scenario that looms large. This worst case could create a major sell off on Wall Street if it were to come to pass and may even have a recession caused by our elected officials.
Let's first look at the best case. The best case scenario for the markets would be a clear cut winner by a wide margin. Whether it is Romney or Obama, winning by a wide margin be key for the markets as there will be no bickering and all politicians can then turn their eyes towards the monstrous fiscal cliff. The Fiscal Cliff is the 800 pound guerrilla that everyone can see but no one wants to admit they see.
The worst case scenario for this market would be an election that is so close. the election needs a recount. Arguing would starts between Republicans and Democrats as anger builds. This country cannot afford these two sides to pick petty battles between each other because they feel the election should have gone the other way.
Should this happen, the petty battles will spill over into the Fiscal Cliff discussion with neither party willing to give an inch. Ultimately, the country would suffer. Truly a sad state of affairs but this is what our elected officials have come to. Be warned, let's see how it all turns out.
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Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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