Just when you thought you had seen it all, Democrat leaders get pipe bombs sent to then all in unison. The market’s reaction was to plunge sharply.
In my judgement, we are finally seeing the effects of dysfunctional politics catch up with the stock market.
Sure the FED is no help. But the 24/7 divisive rhetoric we are seeing is taking its toll. No only on ordinary people, but also on people that live on the edge of sanity.
We are seeing unhinged people plunge over the line and act out more often now. And its getting more extreme.
So, what is the reaction of the leaders and the Press? Dial it back? No, double down and heat things up a bit more.
If one had to wonder what the initial stages of anarchy looked like I doubt it would not be much different than what we are seeing here in the U.S.
Institutions have been corrupted to their core. International players have become significant factors in creating and fostering unrest. The media has become pure propaganda tools so that instead of being the 4th column protecting the U.S. they have become one of the instruments of destruction.
And then you also have a political party that refuses to accept the results of an election. And does whatever they can do to undermine the current government.
Whether it’s spying on an administration, meeting with international leaders to undermine foreign policy, financing groups in the U.S. to create violence against opposition, or social media taking sides and censuring people they do not agree with.
This all adds up to take its toll. And a heavy toll it has taken. There is only so much the human mind can take.
I do not want to place blame here, as both sides have contributed to this without a doubt. But, something needs to be done fast by responsible leaders to get things under control.
Now the U.S. has 3 caravans heading to its southern border. This is not a random event. But a well-financed and organized assault on the Southern border meant to create havoc and fear.
And that it is doing. Its a wonder the market is no down more than what we have seen.
The Fed has its blinders on. Completely ignorant of the international risks and domestic risks. Rising rates in this environment is so bad that one has to wonder their motives.
Even prior Fed heads have begun to wonder.
If Y2K produced a massive influx of liquidity to prevent a meltdown, why is the Fed ignoring the mounting civil unrest and geopolitical risks in their monetary policy?
Let alone, the repercussions of the U.S. debt repayment when the short-term rates rise? And the effect on trade as the dollar dramatically gets stronger.
A conspiracy theorist could make a well-reasoned argument that the Fed is working hand in hand to bring this administration down.
I am not saying that is the case but one could certainly make a well-reasoned argument. After all, inflation is not a concern and has not been for a long long time.
That is my Thursday morning rant. But it’s important as it reflects the risks this stock market faces heading into the midterms.
There is no indication that the media or Democrat leadership is going to change course. It’s going to get much worse. Expect it.
The only good news is that the U.S. has a President that cannot be rattled. Now there is plenty to criticize Trump for. But if there is one attribute he has that is well needed right not, he has in spades.
The ability to keep a clear mind in the face of widespread chaos. Whether you are a Democrat of a Republican you should be thankful. After all, who wants the country to descend into anarchy.
Not all is gloom. It will get better for the markets. Earnings are great. Tax cuts have worked. Employment is at all time lows. Trade deals are being made. And the White House has some very good people in place.
You might disagree on policy, and I do on occasion, but they have some real experts heading their departments. Ones, that are doing their job every day.
This market will stabilize most likely after the midterms. But right now, with the bomb threats coming in at a fast pace I suspect more volatility.
I started a 1/4 mean reversion position in SPY via SSO at the close yesterday. The market is extremely oversold. I expect to take some heat on this first position. But my method triggered at the close and I am sticking to it.
I am available via my skype feed if anyone has any questions. Skype: riccja
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