http://www.options-trading-education.com/24131/stock-options-for-a-republican-congress/
Stock Options for a Republican Congress
The Republicans gained enough seats in the midterm election to gain control of the US Senate in the next congress. They also increased their majority in the House of Representatives to the highest since 1946. The question remains for the stock market if this will make any difference and if so in what direction. Here are a few thoughts about buying or selling stock options for a Republican Congress.
Coherent National Policy
A year ago we wrote an article, Trading Options on a Government Shutdown. In short we discussed how dysfunctional government threatened the financial standing of the US government and the US economy. To the extent that Republicans can get their act together and help govern as adults there is hope for a coherent national policy and an end to bickering. With control of both houses of congress there will be little room to blame Democrats for the ills of the nation.
Good for Business
Is a Republican government good for business? That used to be a given. But under a Democratic president and Democrat controlled senate the stock market has gone up all year, unemployment is at record lows and American soldiers are not dying in huge numbers on foreign soil. What is to improve? The staggering American debt is always a threat. However, it was the action of the Federal Reserve to loosen credit that saved the nation from another Great Depression. If a Republican controlled congress threatens to shut down the government again in a fight over the debt ceiling that will be bad for business. Another part of the Republicans and business theme is favoritism and handouts. To the extent that an enthusiastic congress wants to reward supporters with pork barrel legislation it will likely damage the economy and the markets.
Trading Options as Republicans Gain Control
Elections aside the glut of oil and natural gas has two good effects. The cost of business is lower as more money stays in family piggy banks because families are spending less on gas for their cars. The downside is that oil stocks are taking a hit due to excess supplies. Look for a Republican congress to allow US oil companies to export again. Trading oil options might be profitable in this regard. How about the economy in general? Will employment continue to improve? Will corporate profits continue to go up? Economic cycles are not always amenable to quick fixes by congress. It used to be that congress would use so-called fiscal stimulus legislation to pump up the economy. That will be a temptation for a Republican congress. On the other hand the Tea Party segment of the party has not gone away and will like oppose anything that continues to raise the national debt. To the extent that they block pork barrel legislation that will be good and to the extent that they cause default on our national debt it will be a disaster.
2. The Republicans gained enough
seats in the midterm election to gain
control of the US Senate in the next
congress.
3. They also increased their majority in
the House of Representatives to the
highest since 1946.
4. Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss these free training events!
http://www.profitableinvestingtips.com/free-webinar
Forex Conspiracy Report
Read every word of this report!
http://www.forexconspiracyreport.com
Get 12 Free Japanese Candlestick Videos
Includes training for all 12 major candlestick signals.
http://www.candlestickforums.com
5. The question remains for the stock
market if this will make any
difference and if so in what direction.
6. Here are a few thoughts about
buying or selling stock options for a
Republican Congress.
8. A year ago we wrote an
article, Trading Options on a
Government Shutdown.
9. In short we discussed how
dysfunctional government
threatened the financial standing of
the US government and the US
economy.
10. To the extent that Republicans can
get their act together and help
govern as adults there is hope for a
coherent national policy and an end
to bickering.
11. With control of both houses of
congress there will be little room to
blame Democrats for the ills of the
nation.
13. Is a Republican government good for
business? That used to be a given.
14. But under a Democratic president
and Democrat controlled senate the
stock market has gone up all year,
unemployment is at record lows and
American soldiers are not dying in
huge numbers on foreign soil.
15. What is to improve? The staggering
American debt is always a threat.
16. However, it was the action of the
Federal Reserve to loosen credit that
saved the nation from another Great
Depression.
17. If a Republican controlled congress
threatens to shut down the
government again in a fight over the
debt ceiling that will be bad for
business.
18. Another part of the Republicans and
business theme is favoritism and
handouts.
19. To the extent that an enthusiastic
congress wants to reward supporters
with pork barrel legislation it will
likely damage the economy and the
markets.
28. It used to be that congress would use
so-called fiscal stimulus legislation to
pump up the economy.
29. That will be a temptation for a
Republican congress.
30. On the other hand the Tea Party
segment of the party has not gone
away and will like oppose anything
that continues to raise the national
debt.
31. To the extent that they block pork
barrel legislation that will be good
and to the extent that they cause
default on our national debt it will be
a disaster.
32. A successful options trading
strategy will require keeping up with
event, sound fundamental analysis
and skillful reading of evolving
market sentiment.
