The market malaise is a two part story right now- bad news, and worse news. The bad news is the general economy, and the worse news is the crumbling credit infrastructure. The first cannot be resolved until the the credit systems are functioning effectively again. Unfortunately, we have to be extremely patient as the battles of orthodoxy are waged on our way to survival solutions for the credit system. Every issue is important and every one will require protracted debate. And rightly so, as the only apparent resource at hand is the injection of taxpayer money. This could push some major effects of the credit crunch well past the election as political minefields are avoided.

We are well into a slowdown that will not go away until well after credit systems are functioning again. The fed has made it clear it will avoid stimulus until the bigger issues are resolved. So, the bad news of the economy will be with us for an extended period.

On the good side, the market knows that once stimulus can actually be delivered through the banking and credit system, that stimulus will be provided. The market will effectively stage a significant rally long before the stimulus is effective, but only after the credit crunch is under control. That is not now but is coming soon with a few hangovers. A lot can be made to happen between now and the election, (but not tomorrow) as the taxpayer purse is opened up. Be very patient, we should see some small rallies on the way.