Mid-Term Election 2004 vs. 2010 Comparisons

My investment thesis has been for some time that the market historical seasonal pattern that was absent in 2009 would return in 2010. That historical pattern of seasonally favorable action from November to April and seasonally unfavorable action from May through October has worked on close queue so far this year. I expect that to continue for the balance of the year.

This action lead me to think about the last Mid Term election market ...because I believe that 2010 will likely play out in typical Mid Term election fashion.  The comparisons between 2004 and 2010 are striking. These confirm to me that the market anxiety and volatility we experienced in May over the Greek / Euroland crisis will return in the pre election period as the markets ponder implications of government at large, i.e., the change in political balance, tax issues, Fed competency and most importantly... will the economy find a second leg up.

The summer rally did not provide as much of bump that would have allowed any additional cash to be raised. Tactically, one might still look to sell existing holdings as the odds are good that the vast majority will come down in price during this period. At Delta Global we are looking at putting on some short ETF positions, so please let us know if you would like to have a portion of your portfolio positioned as such.