11/7/12 10:30 PM – Today’s Early Sell-Off

Stocks are down nearly 2% in early trading today, which many people are taking as a sign of disappointment with the Obama victory. I don’t think so for the following reasons:

Economic numbers for Europe reported yesterday showed further slowing in the European economy and European Central Bank (ECB) Chairman Mario Draghi followed that up today with a rather glum speech about the state of things in Europe.
Asia was down today and Europe is also down to set the stage for the US. Don’t underestimate the global effect – it does matter most days.
Yesterday there was a rumor-driven rally in the US that is being unwound
With the election settle, attention now turns to the fiscal cliff, due to occur in January – until it gets watered down, that is a negative for the economy and thus for stocks
The market has been in a slight downtrend that flattened out prior to today

We are at an important support level at 1,400 on the S&P 500 index. I would like to see that hold.

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