A Moore Loss in Alabama! What implications does this have for the Stock Market?

A surprise, for me anyway, in Alabama last night. The Dems winning in Alabama is going to create an entirely new set of problems for the Republicans going forward.

My prediction was Moore in an easy win:) How wrong I was. My next prediction was that the stock market was not going to like it. That prediction is undecided at this point as the markets are unchanged an hour before the open.

I view this election to have wide-ranging implications going forward. The President’s opposition will now be emboldened and the never Trumpers will, of course, move further away from Trump.

The onslaught against Trump will now pick up steam if that is possible. Monday there will be a parade of women alleging sexual assault by Trump. After that, the calls for his resignation will increase.

In the meantime, I suspect many Republicans will start moving away further from Trump.

The Russia, Russia, Russia, is now Sex, Sex Sex. Not a very good demonstration of the model of Democracy that the world is accustomed to seeing.

So again the Republicans, have after winning control of both houses and the presidency self-destructed showing the Country and the World that they are incapable of governing. The problem is as I see it, that this problem of being unable to govern is not restricted to the Republican. The Dems have the same problem.

So far the market has ignored all of this. Of course, we get a 300 pt down move once in a while now on a scare, but for the most part, the market is in denial.

There are so many political firestorms now in the U.S. it would be a miracle to avoid them all. Unfortunately, the governing sides, are becoming more and more polarized if that is even possible. The rhetoric is embarrassing from both sides.

So where does this all end and what effect will this have on the markets?  Its anyone’s guess right now, but my view is it is not going to end well.

Right now you will get an idea early where we are heading by the way the House and Senate handle the calls for another investigation into the president on these allegations.

If the Republicans begin investigations similar to the Russia investigations that will not be a good sign for the U.S. political stability.

There will be a lot of money thrown at the Republicans to start this and I doubt they will be able to pass it up. So my view is more than likely you will see these start up very soon.

The problem, of course, is 2018. Republicans have already dug a hole they may not be able to dig themselves out of. To alienate the base with more hearings might be the death knell for the establishment Republicans. But I am sure that will not stop them.

So human nature wins out again. Funny how humans cannot escape their self-destructive traits.

Now, where does this tirade come into an analysis of the stock market? The more chaos the more uncertainty.

I have been saying this for some time now. And yet the market just keeps going up:)  So, watch and wait. Be cautious and aware of the risks going forward.

When the removal of this president gets started in earnest, the market will crater. And the fall will surprise even the most seasoned investors.

The market is rallying a bit as I type this will IWM the only index in the red.

Of note, Metals and Oil are higher. TLT is higher.

I view the premarket as a neutral bias.

I have 2 bottom reversal trades on right now. TUR and ILF. ILF made a very nice reversal yesterday while TUR is consolidating hopefully for another move higher.

GLD a system trade is languishing as is XNCR a mean reversion trade.

I will be around for a short time on the open.

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


RickJ’s Handicapping Picks


Skype: riccja

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