My timely post of a few days ago was about as accurate so far as you can get.
The D.C. insanity no has consumed the stock market. I could not imagine how much longer the markets would ignore this.
The reason being this has the potential to stall all of Trump’s agenda, diminish his effectiveness in dealing with foreign governments, and if possible create even more division in Congress and in the Country.
The division has now reached critical mass. The leadership in Congress (if there is any) is being derelict in not reducing the venom that is spilling over into the Country.
Kum ba yah and together we stand are as foreign to much of the population as it has ever been. Sides are now polarized with the potential for real violence at any time. It is a testament to our law enforcement that violence has not turned into bloodshed as of yet.
So as an investor what is one to do with this backdrop in the U.S.
My opinion is to forget the bull market for now. There will be more leaks as a result of the special counsel. There will be more innuendo and accusations. The market will get a little time to relax as quiet news periods will be few and far between.
The 350 point drop in the markets yesterday is just a precursor of what will happen if impeachment gets started in the house. It will be ugly.
If you were around and paying attention to the Clinton impeachment in the House it was a disgrace to the U.S. that our politicians sought to bring this action. What is interesting is that many of the same Congressmen that were at the front of the effort to remove Clinton are also in one way or another looking to remove Trump.
If you’re looking for some perspective on how all of this is going to work out I would forget the news media. Look at the betting odds at some of the major offshore books. The bookmakers I have found are the most accurate in predicting outcomes. They are far from perfect but for a perspective, they are as dispassionate and objective as you will find.
Paddy Power has Trump around even money to be an 8-year president. If you read the newspapers and the talking heads at the major networks you would think that Trump will not finish this year. Now that is quite a divergence in opinion.
Regardless of what opinion you might personally have on the subject, you do owe it to yourself when putting your funds at risk to ascertain what reality is. Many a person has gone dusted because they do not account for the fact that their perceptions might be skewed a bit:)
I have no dog in this fight but I am telling you do not let your ideology interfere with your investing.
The above advice as I view it is about the best advice you will get on the subject ever (of course that is a self-serving declaration) But take it any way you wish.
Now, to digress, with this backdrop the Fed is hell bent on raising rates and reducing its holdings of securities?
Compare this to Greenspan opening up the floodgates for Y2K. Or Helicopter Ben and his handling of threats to liquidity.
There are only two reasons I can see that Yellen is taking this stance. 1. She is a complete idiot or 2. She is hell bent on destroying whatever chance the U.S. has to get out of this sub-par growth that we have had for the last 8 years.
For me, it is an either or proposition. You have crisis after crisis here in the U.S. and across the world with not a hint of serious inflation. The only thing I am surprised about is there is no real pushback from the Republicans or Democrats that have the best interest of the U.S. at heart.
I have gone on longer than I intended to this morning but I do wish to hammer home that the tailwind we have been enjoying in the markets is now gone. We are now facing a headwind, one that threatens to derail this bull.
Of note this morning, Indexes are off about 1/4%, Biotech on the plus side, oil off about 1 %, financials, gold, and silver all off.
Looks like a recipe for a soft day today in evaluating the premarket trading.
I did put on a mean reversion trade yesterday before the close in Biotech name BLUE. It is slightly lower in the open. The setup was too good to pass up.
I do think the drop yesterday was overdone so we may just get a bounce into the weekend. If not pay attention!
Some of my reads this morning:
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)
Good Luck Today