Another uneventful premarket with the Stock Market slightly down and except Oil which is down over 1%, all else is around the unchanged mark.
So what is the market waiting for? It seems to me that its all about the tax cuts right now.
So logically I ask what are the chances of a tax cut plan getting through the Senate? Already McCain has indicated he is against it. Several other Republicans have expressed doubts also.
Trump can run around the country all he wants, but there is a handful of Republicans that are going to sabotage his agenda. One can speculate why, but that is not the purpose of this site. The fact is, however, for whatever reason or reasons, there is very little chance that tax cuts get through the Senate.
The Republicans can only lose 2 senators. So, just to start off you have McCain.
Help from the Dems on tax cuts? Not much of a chance. The strategy is to the Dems and Anti Trumpers in the Republican party is that if they hinder Trump’s promises of Tax Cuts, the Wall, Health Care, infrastructure, he will be a one-term president. Of course, that is if he survives the special counsel that both the House and the Senate support on both parties.
You really do not have to be a genius to see the strategy. The problem is its a rather suicidal strategy. Just look at Strange in Alabama. Look at the anti-establishment wave that is sweeping the Country. It’s just getting bigger rather than diminishing.
Even if they happen to remove Trump, establishment Republicans are dead in the water. I do not see them recovering from this debacle.
The interesting thing is they do not even know it. They have some fear in the back of their mind, but they are in denial.
What does this mean for the markets? It, of course, creates opportunity.
We are very soon going to get a dose of reality that tax cuts are not going to pass this year. The markets in my judgment are going to nosedive when this becomes clearer.
That is how I view it. Until the makeup of the Senate changes any legislation supporting Trump’s agenda is dead. Afterall, how many senators up for reelection in 2018 have announced they are not running. What incentive do they have to be reasonable? None at all.
Now, one might ask, what about helping the American people? That goal has been abandoned years ago for the money of the special interests.
I have not seen the odds but I would say 5 to 1 against a tax plan by year-end. And that might be a bit low.
If you can get the timing right, there is money to be made on this trade.
More on that tomorrow
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.
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Good Luck Today
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