After the rally of the past 9 days, the markets are somewhat overbought. Some consolidation might make the ensuing move more sustainable. The number of SPX stocks reaching 30 day highs has broken the peaks of the previous 2 years (see chart).
% of S&P 500 Issues Reaching 30 day Highs
Source: Redwood Technimentals
The back and filling action at this point would be a healthy sign that the markets are not getting too far ahead of themselves.
Quote of the Day:
The measure of success is not whether you have a tough problem to deal with, but whether it’s the same problem you had last year.
- John Foster Dulles (1888-1958)
The very excellent On-line WSJ has an interesting round up of editorial reactions around the world to the re-election of President George W. Bush. Papers like Pakistan’s Nation and the Lebanon Daily Star saw Mr. Bush’s win as strengthening his apparent go-it-alone approach. But some editorial writers urged Mr. Bush to try to make more effort to cooperate with the international community.
It is a revolution of which the consequences will endure longer than the “hangover” of criticism coming from the rest of the world, including France. … It was truly America that made its choice in the person of this Texan by adoption: a populist, mostly suburban or rural, fundamentally nationalist America. Preoccupied above all by its security and focused on the fundamental values of its Christian religion, the two core motivations of the Bush vote. … A new reactionary majority, rallied around Bush by a law-and-order reflex in a time of war has cemented its grip on democracy in America. The rest of the world can deplore it, but it must adapt itself to this reality.
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Times of London, Britain
Bush Has an Exceptional Opportunity — He Must Seize It
The paradox of Mr Bush’s endorsement at the polls is that he is now free of the constraints imposed by voters. He should consider this a liberation and an extraordinary opportunity. He can serve one more four-year term in Washington and has the capacity to shape his legacy like few American politicians before him. He must seize that chance. He can advance an imaginative agenda for himself and his party. … Even if Mr Bush were to do all this and more, there would still be some who belittle him or doubt the sincerity of his motives. That is unfortunate. The President should not waste time trying to appease or win over those who have no time for him. There is the chance, perhaps, that with the passage of time the qualities which Americans see in this politician will become more obvious to others. Mr Bush must exploit the prominence that he has been given for four more years.