Bad Stock Market Bad For Obama and Democrats

The stock market closed at its lowest close of the year today, and its lowest level since November. If you happen to follow the market closely, and pay attention to technical analysis of the market, the current trading pattern suggests that the market could drop another 10% to 20% from current levels. The stock market is often viewed as a leading indicator of the economy, as are Treasury yields. The 10 year treasury note yield is now below 3%. Lower yields and stock prices reflect the expectation that the economy is weakening.

A weak economy spells doom for the Democrats in November. Americans will look at weak job numbers and weak stock prices and conclude that the Democratic economic agenda has failed after being in place for nearly two years. The Obama argument that he inherited a bad situation will fall on deaf ears, if it hasn't already.

On the other hand, Republicans still need to come up with a plan of their own. They can no longer just say vote against the Democrats. They need to convince voters to vote FOR Republicans.

No matter what, Democrats will see losses in November. If the stock market maintains its current downward trajectory, they will lose both the House and Senate.