Even though it would be tempting to say that the marginal new lows in the Nasdaq in the last few days, followed by the sharp rally today, marks the end of a huge A-B-C corrective period since last March, I still think not! Instead, I simply think that slop and chop rules, and will continue to rule into early December. That which seems dramatic today is likely to disolve into nothingness and a reversal tomorrow. The statistical arbitrage managers within our fund of funds product (see the alternative investing part of the website) are likely having something of a field day.

Thinking back through my trading days, the way the financial markets are currently hanging on every word of the Presidential election snafu reminds me of the way gold used to gyrate up and down during the Falklands War. Every time a British ship was struck by an Argentinian Exocet missile, it was good for a $8 gold price pop. The eventual announcement of a ceasefire sent the metal down $30 in a nano-second. Everyone basically knew of course that the war was a minor one, whether it escalated or not, but gold still flew around on every strike and counterstrike.

I think we face a similar phenomenon here. People think the election matters a great deal, but in the end, it will be poor earnings numbers and still excessive equity valuation levels that will matter -- not who sneaks into the White House. I'll stick with our short stop-loss suggested back on Nov 2 above the 100- and 200-day moving averages.

Elsewhere, one market that continues to toy and tease is USD/JPY. For months now I have looked at the chart below and thought it looked bullishly poised. I first suggested a stop below 104.50 many moons ago that has NEVER been elected, and yet to date, we have achieved no satification in any upside breakout. If we have one wish for our return to the United States next weekend, it would be to see a breakout here -- up.

Chart constructed using Advanced GET End-of-Day

Would it make any macro sense to see the dollar break higher against the yen, and yet have equities fail in their rally attempts yet again? Maybe we're wrong on one of them, of course, but at a minimum we think a long dollar position against the yen isn't a bad way to hedge a short equity view.

Lastly, we took a tempting look at CMGI at its broken $14 level this morning, and spied a potentially complete Fibonacci rhythm to the downside. But then we took a look at another Internet stock, E-Bay, and still see a sick puppy here. Note how E-Bay recently broke its trendline support. Thoughts at trying to pick a bottom in the Internet sector are best suppressed.

Chart constructed using Advanced GET End-of-Day

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.