No Follow Through For Stocks Post Presidential Debate 2012 Part 2:
Stocks made no follow through after the second presidential debate between President Obama and Mitt Romney at Hofstra University this week. The market didn’t tank but there was little positive reaction from yesterday’s upswing the first day after the debate. The S&P 500 fell by 3.57 to 1,457.34, a loss of 0.24 percent while the tech heavy NASDAQ dropped 31.25 points to 3,072.87 or 1.01 percent.
The market signaled it might be on track to test support levels after moving in and out of the prior days range and the 1 percent drop in the NASDAQ keeps us from being bullish in the short run while we are still bullish longer term. We would expect investors to pile up on riskier assets immediately following yesterday’s gains if they believed momentum would last which is making us reassess market direction.
Strong housing data yesterday failed to keep investors in a buying mood but it’s not clear yet whether the short term rally has faded. We are keeping a defensive posture as we monitor other leading indicators such as small caps and the financials.