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The Market: When Navy SEALs stormed the hideout of Osama bin Laden and took him out with bullets to the head and chest, everyone cheered everywhere — except on Wall Street.
When the stock market opened later that morning of May 2, the celebration — if you could call it that — lasted only an hour. The Dow first ran up 75 points, or 0.5%, but ended the session with a 3-point, or 0.03%, loss. The action in the S&P 500 and Nasdaq was just as disappointing.
The losses interrupted strong rallies in all three indexes: The Dow and S&P had gained ground in seven of the previous eight sessions, and the Nasdaq had made it eight straight.
Signs of a reversal were nowhere to be seen, though you could say the market was due for a breather. It had been climbing for eight months, adding 32% on the S&P with the only correction of note being a 7% pullback from late February to mid-March.
That's how we wrote off a similar reversal after Saddam Hussein was captured on Saturday, Dec. 13, 2003. When trading opened that following Monday, the S&P rallied 0.8%, only to finish with a 0.5% loss.
So maybe the reaction to bin Laden's death wasn't as unusual as it seemed. As the Big Picture column explained about the post-Saddam drop: "The market continues to feel the weight of its nine-month gains."
That, however, is where similarity between the market's action post-Saddam and post-bin Laden ends. In 2003, the market resumed its rally the very next day, and finished higher six weeks in a row. This time, the market has closed lower five weeks in a row — the longest such S&P 500 streak since August 2004.
Yes, the market may have been discounting the "soft patch" the economy seems to have hit. And yes, another downgrade of Greece's credit rating and a warning on Italy's debt have caused new worries about Europe's debt crisis. Or so the market analysts tell us.
But no one really knows why the market does what it does. There are simply too many inputs. We do know, however, that one will loom ever-larger in the year ahead — who will occupy the White House in 2013.
It's worth noting, therefore, that many believe the successful bin Laden mission improved President Obama's chances for re-election immeasurably. Maybe it's that prospect that the market is coming to grips with.
Recession: Two years into a "recovery," the unemployment rate leaps to 9.1% and just 54,000 new jobs are created. Is this just "bumps on the road to recovery," as the White House insists, or something more dangerous? This has been the most miserable recovery in modern history. Not only are ...
Leadership: Paul Ryan is a known numbers cruncher. But last Thursday the House budget maven also out- lined what that means for America's place in the world. That's valuable. To many, it was impossible not to think the Wisconsin Republican might have his eye on the White House for 2012. ...
Media: The new editor of the New York Times is Jill Abramson, an old hand who thinks the Times is God. But the Gray Lady is one journalistic deity no one can resurrect. It was a statement so telling, and so over the top, that within hours the Times removed it from its Thursday web story ...
Bureaucratic Sclerosis: A Gulf Coast governor tells Congress that the administration's inept response to the Deepwater Horizon explosion has done more damage to the local and national economy than the crude itself. On Friday, we learned that the nation's unemployment rate rose above 9% again ...
Revising History: In the left's endless attempt to push tax hikes on our beleaguered economy, it's now peddling the bogus claim that tax rates are the lowest they've been in 60 years. At the White House confab last week with House Republicans, President Obama reportedly tried to make the ...
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If a stock breaks out and makes a 20% gain within three weeks, you should hold it for at least 8 weeks.
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