This is a stock market that loves to break all the rules, so perhaps we should expect the nagging uncertainties of a still-unsettled Congressional election to cause shares to rise. Wall Street supposedly abhors nothing so much as a future that is up in the air, but we may not know for weeks whether the Democrats will control both houses of Congress. Big Pharma seems to have made up its mind about the outcome already, even if other investment sectors have not. Pfizer, Merck and Johnson & Johnson all got whacked, acting as though a slim Democratic majority would somehow be able to revive HillaryCare and foment jihad against drug manufacturers and other providers of health care products and services.

Meanwhile, we doubt that George Allen will be able to successfully challenge a close tally in Virginia that has him losing a crucial Senate race. So, assuming the Democrats will prevail in both houses, we should look for more selling in the coming weeks, not only in the drug stocks, but in the shares of health insurers, defense contractors and tobacco purveyors. If so, that would seem to make our 13045 target for the Dow more distant. But suppose investors simply ignore the supposed negatives and resume their all but relentless push higher straightaway?

Actually, it’s not the bulls that matter, since they are rarely so enthused about stocks as to be capable of pushing them sharply higher . That is properly the task of shorts -- popping the market through pockets of supply and doubt even as the pessimists scramble to meet margin calls. However, if this is to occur we should expect the beginnings of a short-squeeze to become apparent within the next few days, since that’s about how long it will take for bears to realize that it’s going to be business as usual no matter who controls Congress. There are changes coming in Iraq, for sure, and we shouldn’t be surprised to see the House of Representatives enact, within the next couple of months, a timetable for the withdrawal of U.S. troops. But just what that might mean for the U.S. and the world down the road is anyone’s guess.    

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Last Call,  Australia!

There are still a few seats left at the Hidden Pivot seminar scheduled in Sydney, Australia, on  December 2-3.  You can  request a registration form and further details by clicking here.  Please specify which session you are interested in.