Why the Stock Market is Down

Yesterday the day after President Obama was re-elected stock marked declined. Immediately news articles appeared titled “Wall Street Dips on Obama Win”.  This kind of thing happens every morning.  The market moves in one direction, and articles assign a reason.  IT would be just as easy to write “NASDAQ falls from #whyRelationshipsEnd Twitter Tag Trending.” But does anyone check for causation?   As any student of Math or Science knows. “Correlation does not imply causation

NASDAQ, SP and The Dow Jones all down about 5% over the past month.

So why did the market go down yesterday?  The answer is, the market is a complex system that reacts to an almost infinite stream of data analyzed by hundred of millions of investors. Several notable things have pushed  the market down recently, and particularly caused it to dip yesterday.  It’s hard to tell what effect the re-election had, but it certainly didn’t move the market up.

1)  Missed Earnings and Expectations

Several companies have had disappointing earnings this quarter IBM, Apple  APPL, Amazon AMZN , Toyota TM.  These misses are being absorbed by the market. When major companies like these move down, they pull down their  respective indexes, and the over all market drops.

2) EU Debt Crisis

The day after the election, the EU issued a report raising concerns that IMF austerity budgets for struggling countries like Spain and Greece are deepening the recession in Europe. Many analysts felt this prompted a sell off in the markets .

3) Sandy’s  financial Impact

More than a week after the hurricane hit the New York area, analysts were still assessing Sandy’s impact, and the market is still dropping. Wall Street and the people and companies in the financial industry are still struggling from the storm.  Still not everyone can get to work, and even those who can are struggling to help friends and family with basic necessities. Those who have started to return to normalcy are still helping those who haven’t. Hard working families on Long Island are tripled up in house with power.

So we are still in a Bear market that has been going on for several months now.  As for the impact of the re-election, time will tell.

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Hurricane Sandy: Shelters and Power Outages

Google has some useful maps, this one shows power outages and available shelters. http://google.org/crisismap/2012-sandy

Power Outages:  Click on the lightning bolts for more detailed regional maps.

Shelters: Click the checkbox labeled Emergency Shelters to the right of the map to show pink dots with detailed shelter information.

Watching Hurricane Sandy: Storm Surge and Tide Heights

High Tides

As the hurricane hits New Jersey tonight  just south of Manhattan, a good way to measure storm surge is to track tide heights.

At http://tidesandcurrents.noaa.gov/gmap3 you can track tide heights at any NOAA station.

Tides this morning at Sandy Hook, NJ were 3 foot above normal.  High Tides will be even greater at 8:30 PM tonight , just before the storm hits, and afterwards at around 9:00 AM Tuesday morning.

This chart shows that the morning high tides were 8 feet above MLLW.  Mean Lowest Low Water is the average of the lowest daily tide.  The Blue line on the graph is the norm, the red is current. Today the high tide height was 8 feet above the low.  Normally high tide is around 5 feet above the low. So this morning there was a 3 foot storm surge in Sandy Hook.

Flood Warnings

Now that we understand MLLW we can interpret these flood warnings. http://www.google.org/publicalerts/alert?aid=a1220a6e14dbe45f&hl=en&gl=US&source=web

For example Kings Point, NY is forecast to have a high tide 15 -16 above MLLW.  Normally high tide there is around 8 feet above MLLW,  so that represents a predicted 8 foot storm surge.