What news is out there to propel the stock market to new highs?

Another wild day in the stock market on Thursday. I am flat on trades I have shared and still want to see more downside before I consider mean reversion trades.

The question you have to ask yourself is what will propel this market to new highs? I know that the stock market tends to rise on a “Wall of Worry”. But still, there need to be positive things happening to get the market moving.

The top of the list is the Tax Cuts. Without that in my judgment, we would be plunging lower.

But, what else is there?

Dysfunction in D.C. keeps getting worse if that is possible. Trump just fired Tillerson and wants to move Pompeo to Sec. of State. And has a 30-year employee of the CIA he wants to head it now.

I understand the pros and cons both sides are waging, but the general rule is that the President gets to pick his cabinet within reason. The Dems are pretty much-opposing everything. But already we have Paul objecting to both nominees. And Paul is a friendly voice for Trump in the Senate!

Considering that the Senate can only lose 1 vote now in the Senate on the Republican side, it makes that nomination of either of the candidates slim. And this is at a time when Trump has purportedly made inroads on denuclearization of N. Korea.

I will not debate now the pros and cons of the candidates or Paul coming out of nowhere on his principled stand against the two, to the detriment of the White House. But suffice it to say that this is a prime example of what is wrong with D.C. And from all intents and purposes, it’s not going to get any better as we head into the confrontation of the special counsel and the likelihood of a 2nd special counsel.

Next, we have this political divide spreading over into the population, where more and more the humans in the U.S. are being as dysfunctional as the politicians. You see that in the Gun Control rallies and immigration. There is no debate anymore its one way or else with the rhetoric getting hotter and hotter.

Then we have Russia getting aggressive, we have Tariffs with the potential now for trade wars and the list is too long really to go through this morning.

Then there is the Fed. Despite this backdrop, they are in tightening mode! I can see in a more placid political environment monetary policy would be concerned about the risks of inflation. But with what is going on at home and abroad, the risks are not inflation but recession as I see it if things go wrong. Afterall, boycotting is the norm now rather than the exception.

From boycotting news shows to corporations that disagree with your political positions. And all of this is being rabidly supported by the politicians and the news media.

I cannot recall one leader stepping forward to reasonably suggest an end to the madness we are seeing engulf the U.S. at this point in time.

So, you get the picture. I am in no way rendering opinions on either side of any issue but only explaining that where is the market going to go with what is unfolding.

The bottom line is to be careful if you’re heavy in the markets right now. It would not take much to blow up this market at this point. Top on the list is if they try to remove Trump from office. The odds of that happening are still below 50% as I see it but high enough to consider. If that happens we will be down at least 1000 points in the down on the day it is initiated.

With that gleeful introduction, the markets are mixed this morning 20 min before the open. Of note, financials are positive and TLT negative. That is slightly positive premarket.

Again, it’s too early for me to think about mean reversion although a sharp down day today will get me interested.

Let’s see if there is some news I have overlooked that will propel this market to new high:)

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

RickJ’s Handicapping Picks

rickjshandicappingpicks.com/investing

Skype: riccja

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