Global markets rejoiced Obama’s victory yesterday with Asia up sharply on Wednesday. The market finished strongly on Tuesday, a rarity these days since stocks typically decline off their session highs. Any intermittent rally in a bear market should be viewed as an opportunity to sell stocks.

But investors should continue to accumulate busted credits like investment-grade corporate bonds, TIPs and municipal bonds – all trading at hugely attractive levels following a blowout in September and October.

If you must add equities at these levels then consider convertible bonds where premiums have collapsed and yields trading at 1994 levels. Convertibles provide the best equity-linked values with high income and the scope for attractive conversion rates into common stocks. Convertibles, until recently, were basically dysfunctional or barely trading; many hedge funds have tanked because convertible arbitrage has failed as a hedging strategy in 2008. But the values now are enormous.

Previous “honeymoon” periods for the markets following a newly elected president show a generally rising trend for several weeks followed by a decline later. I expect the markets to remain steady over the next few weeks as we conclude Q3 earnings season, credit stress eases further and stocks muster a long overdue bear market rally following weeks of protracted selling that culminated into a crash in early October.

Obama won’t change much as it pertains to the markets. In fact, he’ll probably raise dividend tax rates to 20% from 15% now and perhaps even abolish short-term capital gains or raise capital gains tax rates. Either way, the markets won’t get help from Obama.

U.S. stocks are now about 20% above their October lows as measured by the S&P 500 Index. I suspect we’ll continue to move higher heading into December. But make no mistake about it; this is not the start of a new bull market. The economy is deteriorating, earnings expectations are still too optimistic and the consumer is starting to increase his savings.

Deflation is now a central theme for global central banks as they wrestle with rapidly declining asset values in stocks, real estate, bonds and most alternative investments, including hedge funds. It’s a mistake to believe the stock market has bottomed because six months from now the economy will look much worse, not better. Don’t be fooled again by this bear.