Out Fox The $treet

Intrade might be one of the most watched websites as the year rolls along in 2012. The odds of Obama being re-elected in 2012 will be very key for the markets. After the weak economic data of late the odds have dropped from over 60% in late April to 53.6% today. Investors would be wise to check out these odds every week. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

According to Intrade.com  the odds of Barack Obama being re-elected President in 2012 has dropped below 50% now. Considering he spent most of the year at or above 60%, it shows the significant weakness he has faced as the economy falters. Intrade is the world's leading prediction market though I haven't seen any details on the accuracy of the predictions. They are based on actual money invested so its people putting hard earned money at risk. Probably much better than a random poll of 1,000 people that would rather not have answered the phone. The reduction in the chances of Obama being elected in 2012 could help push the markets up. Otherwise, summer 2012 could be another rough year if the markets have to come to grips with Obama for another four years. Anybody recall the end of 2008 through March 2009?

Note: Main computer was without connection to the internet last week so I'm just now getting back to being able to post.  Interest poll results from CNBC on whether Obama should cancel his vacation due to the markets and economy or take it anyway. Surprised to see that 47% said he should cancel his vacation. Considering he tends to spook the market when he speaks wouldn't it be nice to go a week without his constant bashing of the wealthy? Of course, 53% of the voters want him to go on vacation or said it doesn't matter so maybe that's a sign that investors think the market would be better with him gone. At least a signal that him being at work sure doesn't help. Should President Obama Cancel His August Vacation? He should cancel his vacation 47% He should go on vacation 24% It doesn't matter 29% Total Votes: 13486 Not a Scientific Survey Results may not total 100% due to rounding

This naturally has huge implications to the stock market from now until the November mid-term elections. The market will continue to rally in whats suppose to be a typical weak Sept - Oct period if the odds remain above 70% of the Republicans taking the House of Representatives. Intrade.com is the website where people bet their own money on outcomes such as elections. Right now you have to pay $72 to get $100 if the Republicans take the House. That's actually a lower % then I'd expect at this time. Anyway, as that number goes up the market will surely follow. Anything that pushes Obama towards the center that leads to him talking about business tax credits versus cap and trade taxes will be bullish. Below is the current chart. As they say, people putting their money on the line are likely a lot more accurate then people on TV spinning the results whichever way suits their employer. Something definitely worth watching.

Today's trading was all about clarity. Though the market started weak and it appeared that the 200EMA was going to become major resistance, all of the troubles in this market seemed to clear up within hours. First, BP caps the well and stops the oil from gushing into the gulf. This will improve confidence assuming of course it continues to work and passes numerous pressure tests. Second, Congress passed a Financial Regulation bill that lacks true to punishing power to the industry. While not a bullish bill by any means, its at least done and alot less harmful then feared. Third, Goldman Sachs (GS) settled with the SEC on fraud charges. The fine was only $550M which was considerably less then feared. With GS being such a market leader, this settlement will unleash the stock and one of the leaders that has held the market down since mid April. The clarity on these subjects along with news overnight that China has been successful in slowing down the economy from torrid growth is also ...

Wow... What a difference a couple of days can make. On Tuesday, the SP500 closed above 1,150 signaling a potential breakout to 1,200-1,250. Then Republican Scott Brown won the Senate seat in very Democratic MA suggesting that the market would see the breakout rally. Guess what? At the same time that Brown was giving his acceptance speech, news was leaking in China that some banks were requested to stop lending for the remaining of January. Any since China seems to rule the world economy and not the US anymore, the market got spooked an so after 2 trading days the SP500 is barely above 1,115. Now its on the verge of a breakdown signaling the possible correction is finally here. Its seems that everybody is already on board with the drop so that gives me hope that we'll pull out of this tailspin. Pisani has a good article on CNBC regarding the issues: Oh, calm down. Worries about an imminent correction are a bit overblown, at least at this point. The S&P 500 hit a 15-month high o...

One way to play the ever growing government reach under the Obama administration is to invest in internet companies that are helping the governments promise under Obama to be more transparent and internet centric. TerreMark (TMRK) fulfills that role as the Data Center operator that now runs some of the biggest government sites such as data.gov . The stock is also on sale after being hit 15% after reporting a strong Q2 with revenue and EBITDA a the high end of estimates. Its the 2nd time the stock appeared ready for a major breakout only to be hit by major selling. The last time was in early July when fears of internet security issues sent its stock plummeting. TMRK is highly leveraged like the typical data center/telecom provider of the 2000 era. It takes a lot of capital to buildout the data centers and thats been know different with TMRK. They recently completed a $420M debt offering. Thus they provide the opportunity to invest in a high risk leveraged play just as the economy is com...

It's just starting to look like the perfect setup. The markets have been in a downward spiral since Oct '07 - 16 months. The economy has been in a recession for 14 months (counting January already). The media is very pro Obama and has been anti-Bush. Wouldn't it just be a great story if the markets rallied on Obama's inauguration. Wouldn't the media just love it. From a technical standpoint, the markets had a perfect setup last week. On Thursday, the S&P had a reversal at 820. Basically the low of this market except for the brief 2 day drop below 800 and dramatic snap back. Then on Friday, the S&P closed over 850 which a lot of technical traders consider the low of the trading range. Otherwise, buy at 850 and sell when the market reaches 920-940. Currently the 50 day EMA is at 904 so a move above this level would also encourage buying. From a psychology standpoint, the situation couldn't have been dire the last 6 months. Of course, partly from the fea...

As we watch the S&P500 surge 4% to over 1,000, it has probably caught alot of people off guard expecting a further selloff with Obama likely to win the election today. The market has enjoyed a nice rally the last couple of weeks following widespread panic selling and hedge fund liquidations over the previous couple of months. We're now likely seeing a rebound as the market is now seeing more certainty with the election finally happening. The market has likely more then discounted a Obama win and is now coming to grips with the facts that the world won't end. In fact, we've lately heard that Obama will likely delay the expected tax increases until maybe 2010 at the earliest. As usual it appears the market has priced in the worst case scenario and now is waking up the reality that world isn't going to end. After such a huge run, it's likely that the market will use the 1,000 point area as a place to pause before the ultimate rally. We'll likely see 940 or 960 ...