The Stock Market took a sharp dip just before the close on Wednesday. The cause?
There is a lot of speculation as there always is, but to me it looks like its all about China. And in more than people realize.
Of course we have the trade deal talks. And it appears they are not going so well right now. But, more importantly even the most naive know that have of Congress is in bed with China.
If the truth were known almost every person in Congress is getting some monetary benefit from China, by hook or by crook. Some of the most notibles are McConnell, and Biden. But there are many others.
So, why would China make a trade deal that benefits Trump, know they may well be able to get a Chinese friendly person in the White House in 2020. Not only that but they have the power to exert influence over the electorate.
Hurting farmers would hurt Trump’s support in the heartland. And just an overall failure of a deal will hurt him a bit nation wide.
Then we come to Nafta. Trump has done the impossible and renegotiated Nafta to where American jobs do not take such a hit. How he did it is beyond me, but he did. But unfortunately this needs to be ratified in the House and Senate.
The chances of that happening are virtually 0 . The Dems are not going to give him a win like that. And truth be known I doubt he could round up 50 Republican votes in the Senate. They just do not want Trump to be reelected.
And then we have the Southern Border. This to me is the picture of a country that is rapidly in decline. When you cannot even get politicians to support protecting against uncontrolled illegals pouring over or Southern Border the end game for the U.S. seems to be rapidly approaching.
The U.S. political system has failed big time. To quote John Adams “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”
And in my judgement that is what you are seeing played out in real time before our eyes. Yes it is history in the making but as someone that grew up in America, its a tragic event.
There is much more, but I do not want to push anyone over the edge this morning:) And of course, this could be just the ramblings of a paranoid delusional person, that has no grasp on reality:)
As a gambler I always tell people you have to factor into the equation that your perspective may be off. There is always that element in any observation. And I do factor that in. But here I give the chances of that pretty slim.
There is a new magazine that has just come out.
https://humanevents.com/ I highly recommend it. Raheem Kassm is the Editor in Chief, and he is a breath of fresh air discussing current events.
It leans right but gives a very analytical approach to the various issues and news. Something that is missing from the mainstream media.
So where does that leave us in the markets. In the short term most of this is a question of timing to take advantage of the opportunities where the market over reacts. Both on the long side and short side.
In the long term, we are in uncharted territory. When was the last time it was mainstream to have hooded thugs roaming around terrorizing people. When was the last time it was mainstream identity politics to become epidemic, when was the last time that the media was almost all in the tank for one party?
As I see it, this cannot end well for the U.S. Americans have become too complacent. After all, this is the home of the free and the land of the brave. But as eastern European countries know so well, Freedom can be fleeting.
As John Adams said: “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”
As I see it that is what is playing out in real time before our eyes. On one side we are witnessing history, but on the other as an American who has lived his life here, its tragic.
So where does that leave us as traders? In the short term it is just a question of sticking to the plan and taking advantage of exaggerated moves. Take advantage of human nature.
In the long run it becomes much more complex. As I view it, if Trump loses in 2020 the trade of your lifetime will be available. Get out of everything. The market, real estate , and head to cash.
Preferably with a yield. Cut your debt. And prepare for the worst. In addition, consider shorting the markets, but you will have to pick an instrument that you can stay into for some time. And I would not allocate more than 10% into that short.
But running up to 2020, I suspect Trump will be keeping interest rates low, pushing for that huge infrastructure bill, and overall not reducing spending. This will in turn give him his best chances in 2020, but also as an investor, it means more of this bull market and appreciation of home values.
As we approach an hour before the open, the markets are hovering around the even mark. We are overbought, after all we just made new highs after the V shaped recovery.
TLT and the USD are also around the even market. I suspect we have some more downside today, but its a dip that should be bought.
I have been in and out of various trades and have been on a nice run of late on my short term trades. I share most of them with my sports handicapping subscribers via Viber. I include that as part of the sports handicapping service.
If we get a big dip again today, it will start peaking my mean reversion trading interests. But its a bit early to think about that for now.
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:) In addition, I share all my short term swing trades to subscribers.
Good Luck Today
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