School's Out for the Congressmen!

Throw your pencils and notebooks in the air! The 109th Congress is out for the year and they've all gone home. Hooray!

With many of the Senators and House Representatives spending their winter vacation on reelection bids, that means no more legislation until 2007 at the earliest. Certainty of no new regulation is bullish for stocks in the closing months of 2006.

Even better, the upcoming mid-term elections promise two years of Congressional gridlock and a lame duck President no matter which side emerges victorious. Neither Republicans nor Democrats will have a large enough majority to pass through major legislation. The resulting lack of uncertainty will melt away lingering investor risk aversion tied to domestic politics and allow stocks to move higher.

No more pencils, no more books…no more Senator's dirty looks! Congress is out for the year and that's one less worry for stocks.