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Health Care Debate: "Grassroots" or "Astro-Turf"?
And what are the implications for the markets?
Whether you get your news from the internet, TV, or the newspaper (if your town still has one) the health care debate is everywhere. Town Hall meetings across the country have turned into mob scenes and in some instances, riots. Spontaneous or orchestrated, one thing about these demonstrations is clear -- they're all very YouTube-able. Sure, Congress is working on a bill, but the details are still to come. The House isn’t even in session. And then there’s the Senate.
In truth these protests are more about politics then policy. Think back to the months leading up to the election. Remember how polarized the county was? You could tune in to Fox News -- which was all “Mc-Bush”, or you could switch over to MSNBC -- where they had already anointed the “Chosen One.” As Election Day drew near the polarization became even more intense. And it didn’t go away after the election. The “Party of No” fought the new administration at every turn.
Political polarization is one trend among many that come with negative social mood (p. 228,
HSB). Others include protectionism, malevolence, fear, and anger. Negative social mood will only become moreso as people continue to lose jobs, face foreclosure, and watch their standard of living decline. Once the first rock gets thrown through the plate glass window, there’s no turning back.
We’ve noted before in these pages that the stock market accurately reflects social mood. Indeed, social mood is the engine that generates Elliott Wave patterns. The patterns can seem confusing because they unfold across different time frames and at various degrees of trend. You can be in a large Cycle or Super Cycle trend downward and still have bounces up at Primary or Minor degree -- this is what we are in now. Readers of these updates may also be familiar with our “All the Same Market” theory. The premise is that in a deflationary environment, a contraction of credit or liquidity puts pressure not only on stocks, but also on foreign currencies, metals, oil, grains, meats, and softs. In a third of a third of a Cycle C Wave down, these markets will see a highly correlated decline.
So the Town Hall meetings reflect the violent mood that can drive markets down. Our analysts study social mood and the trends it produces; in turn they identify the lowest-risk, highest probability trades. Try the Flash service and see their work for yourself – delivered via email with trailing stops.
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