We are witnessing an amazing set of events as world leaders are under pressure to step aside as citizens in many oppressed countries show their displeasure. We saw Egypt’s Mubarak tossed out and now Libya is on the verge of civil war.
A question that comes up is will these events be the undoing of the steady rise in the US stock market, or will it embolden democratic countries like ours, who may be able to capitalize on these new developments?
On the one hand, we’re already seeing oil prices spiking, so at least in the near term, that must be seen as a negative, especially if the the supply of oil dries up. On the other hand, could these unprecedented events force the US to continue to seek alternative energy sources, lest we continue to be at the mercy of those countries we so rely on?
Also for consideration; will any new regimes be more or less friendly towards the US? Obviously, that depends on who takes control once the dust settles. But, some might see great opportunities that could be of benefit to us if the flight to democracy trend continues to spread.
When the market opens for business on Tuesday, we should at least get a decent idea what traders are thinking. The market is so overbought here that this could be the exact set of circumstances the bears have been waiting for to shave off some points. But, I wouldn’t bet against the market, at least not quite yet. Instead, we might see that any initial selling will be seen as a fresh buying opportunity, depending on how deep that selling might be. If instead we see a nice move to the upside out of the gate, that just might tell us that what we are seeing unfold before our very eyes might well indeed be seen as benefiting the US and its economy in the long run.