The Stock Market just keeps ignoring the political chaos in the US and stays strong. How much longer? My guess is until it is convinced Trump will lose in 2020. Then look out below. The Trump rally will be over, and we will be heading south, and fast. It will be the trade of a lifetime.
This morning the markets are gapping higher by 1/4%. TLT is +1/2%, @cl is -1% and vix.x is -1.21%. It appears to me that if we gap up a gap fill trade would be an excellent trade this morning. My guess is this week is going to be a soft week for the markets. The best to hope for if you are long is a consolidation. The odds favor a pullback lower this week.
I am looking for some short trades, mostly in put options and mostly day trades if they do not develop by the end of the day. They are counter-trend trades so I do not wish to get caught here on the wrong side. I made one trade yesterday morning that went nowhere so I exited at breakeven.
The political chaos gets worse as we await the IG report on the FISA abuse. Now a “
whistleblower” comes out based upon third-hand info and the media goes hysterical as do the politicians. First, this person is not a whistle-blower. The entire scheme was rolled out methodically as they usually are with the press lapdogs joining in and the impeachment crazed house finally looking like they will self destruct.
The odds of impeachment are over 50% now and as I predicted long ago, I thought impeachment was going to happen. They just cannot help themselves. Between human nature and a political system that has been destroyed its almost a certainty. The money and the pressure are gushing into DC to get the House to impeach.
And I assure you the Senate will eventually vote no, but it will not be a slam dunk. There will be Republicans in the Senate that will want a trial. Mostly the ones that are not up for reelection. Trump is a threat to every establishment politician in DC. Every one of the crooks.
How will it all end? If Barr does not get to work and soon, things will spiral out of control. I expect Trump to win in 2020 and not get convicted in the Senate. The bar is too high for a conviction. But, the politicians will have finally accomplished a permanent fracture of American society.
Now how the stock market holds up in all of this, its anyones guess. I would have expected a reaction before now. So, its wait and see. But its time to be conservative in the markets.
On the international front, things are settling down a bit, at least from what they were. Trump is a star on the world stage.
Oh yes and the USMCA, dead in the water. The Dems have jumped the shark. There will be nothing out of the House that helps the American people if it even remotely helps Trump. The betting odds are 5 to 2 against USMCA passing by the end of the year. Think about it, a no brainer, and it will not pass.
Good weekend in football, more on that in the next post as markets opens in 15 min.
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