Blatant Reality

By Jonathan Williams

Hmmm…I wonder why the Dow almost dropped 500 points today? Actually, I have a pretty good feeling that Obama’s win yesterday had something to do with it.

 

 

Yea and this drop is after an almost weeklong recovery the Dow had seen since October 27th. So before you start telling me not to blame Obama for the drop in the market let me pose a question to you: If the market had been recovering for the past week and everyone knew that Obama was going to be elected, why the sudden drop after the predicted outcome came true?

 

Before I give you my hypothesis, lets look at the month long gragh of the Dow:

 

 

If you look at the trend of the market, it is consistently going down until the 27th of October. During this whole period, Obama had a fairly large lead in the polls but something changed around the 27th. The polls started to tighten, be it ever so slightly and news articles came out stating the McCain could have a shot at winning. In conjunction with this, swing state like Missouri, Indiana, and North Carolina, that up until a couple days before the election were polling for Obama, showed McCain with a slight lead on election day.

 

During this whole period where McCain seemed to possibly be making a coming, the stock market seemed to be making a comeback as well.

 

So is this all a coincidence and I have missed some spurious factor that has caused the stock market to first go up with the hopes of McCain pulling it off and then crash when Obama wins? Possibly, but I like to stick with Ockham’s Razor: “All other things being equal, the simplest solution is the best.” At the very least, if the rise in the stock market isn’t at all linked to McCain’s supposed comeback, the mini crash we experienced today can surely be linked with Obama’s win.

 

Oh yea, did I mention this is the biggest post election drop in history and that I predicted this would happen last Saturday?