bullshit bullshit. Over the course of republican vs democrat ownership of the white house there is less than a 1% difference in market performance historically. To stand up and say republicans get elected and the market drops is just adding more bullshit to the fire.
Zengum - the markets aren't overvalued compared with historical averages. In fact, using P/E ratios and the like it is easy to see that the market is undervalued in comparison to history. I'm not telling you to run out and buy, but just understand this isn't like the late 90's when the values were out of wack and begging for a collapse. This time around the recession isn't market driven - it's economy driven. The market is following the sentiment rather than leading it.
As far as the traders driving this - keep in mind the largest blocks of money invested are in mutual funds. As people see drops in the market they panic and sell their funds. Fund managers have to give them cash three days later so they have to liquidate holdings. When they liquidate it drives prices down which causes people to see drops and sell their funds. Fund managers have to... See a pattern here?
When you add program selling (buy/sell strictly based on share price rather than fundamentals) to the mix it becomes a pretty big snowball.
Hold on to your hats and enjoy the ride, it isn't over yet. The only good thing I can say is that I hear a lot of people panicking and declaring their is no end in sight. Historically, as long as you have experts saying, "the bottom is here today/next month/..." then you've still got plenty of room to drop. When people start tearing their hair out and the experts start announcing we're going to return to a 777 DJIA then we're just about to the bottom and the selling stops. That is followed by a period of herky jerky gains and losses as the money gets back in.
(It works the other way too. When you hear people talking about expected new high after new high, you might want to think about going more conservative) Not that a shiny shoe salesman would ever give you honest information, though.
