One might say the honeymoon is now officially over!
After a month of love over the new US President partisan politics have once again taken over Washington. As a result, we have now come to the first big test of the new Obama administration.
On concerns about over spending (of all thing!) the recently proposed 'stimulus' package has now come in doubt. As the current bill has been delayed in the US Senate, equity prices (and specifically bank stocks) have fallen. Should the market believe the package will fail to meet its' needs prices will break support (currently near $80) and a new sell signal will be established for the US equity markets.
The true irony of this situation is the fact that the now 'fiscally conservative' Republican party are the same politicians that saw the total US debt more than double over the course of the Jr. Bush years. Now the remaining Republicans in the US Congress have abandoned the new President - suggesting that his proposals are nothing more than waist-full spending, how pathetic! Remember too, not a single Confederate state voted for Obama last Novemeber, who say's race isn't an issue any more......
I'll get off the soap box now.
Summary: Short term traders may look to play a break of the recent trading range (as noted on the chart above). Investers have no business even looking at the stock market now.
That's all for this week,
Brian Beamish FCSI
