Markets gaping down on a Monday morning slightly. Of note, Metals, and oil weak.
That to me gives the markets a slightly negative bias premarket.
I am a bit behind the curve this morning as I slept in with no baseball to handicap today.
But let’s go over some significant developments on the home political front.
The g20 was an overwhelming success if you ignore the spin. (there is more spin than real news these days)
But, this is overshadowed by two new developments that will muddy the issues politically.
First, you have the revelation that Comey’s leak had classified information in it. This is not a small thing. If true it will most likely destroy the investigation of the special counsel as everything was premised on Comey’s leak.
Now, a caveat is that in normal circumstances that would be the case. But these are not normal circumstances in our political environment. Normally, a special counsel would not even be considered in this circumstance. So, there will be a battle now and this gives the anti-special counsel side something to work with.
The 2nd is a report that came out that if true destroys the idea that Russia hacked the DNC. I say if true because it is a rather technical document and beyond my ability to discern whether the findings and conclusions are accurate. However, it seems very logical to me, especially since the DNC to this day has refused to turn over their servers to the FBI for examination.
So, why is this relevant for the markets? If Trump goes down the markets will plummet short term. The reasons are that the turmoil caused alone will be enough to make market participants nervous. But also the policies he endorses are very much pro U.S. business and worker. If he goes down it is uncertain what policies will take their place.
So anything that supports the idea that Trump will be around for awhile is positive for the markets.
This of course completely disregards any political beliefs you and I may have on the subject. It is only for market analysis that this is being discussed. The more that our political process gets embroiled in its insanity reasonable people should understand that to take firm dogmatic sides these days is a mistake and a hazard to the stability of your mind:)
Once you lose your mind you have nothing!
As if things were not more complicated, Congress is back in session. Expect turmoil. Typically I would view the present time to get long for a while. But, with Congress back I do not expect anything but bad news. Health Care is dead in the water. The Republicans cannot get 50 votes no matter what is in the bill.
The merits mean nothing at all. The never Trumpers are getting more never as each day passes and will anything within their power to defeat Trumps’s agenda. They will risk the house, senate and presidency, that is how entrenched they are.
How many are there? I would say 5 to 10. They can only afford to lose 2 votes. Not a snowball’s chance in hell that health care passes.
That also means tax cuts are most likely dead in the water also. Wait and see how you’re going to get the same BS from Congress as your getting now on health care.
It is all out war right now. Now Trump also plays a part in this. His position with Russia and Putin was thought out and planned. He is raising the stakes now gambling that the American people are with him.
That is his ace in the hole right now. The American People. Forget the polling, it means nothing as it did pre-election. The American people are behind Trump right now and more and more each day. If he loses them however he is finished.
In raising the stakes knowing the Never Trumpers(globalists) were going to go nuts with his approach to Putin and Russia, he is treating them the same way now that he treats the press. Again, it was no accident that Trump has taken this approach.
So far Trump has been a master at dodging everything that is being thrown at him. Whether you like him or not you have to admire his tenacity and strategic planning. After all, CNN is on the ropes now because of Trump.
But, the problem is there is only so much he can do without a DOJ. And therein lies the problem for Trump as I see it. With at least a neutral DOJ it is going to be very tough for him to pull a rabbit out of a hat.
I have gone on long enough this morning and I could go on quite a bit more discussing Sessions and the implications of Trump appointing him as AG.
But the bottom line is the surprises to the market seem to weigh out on the downside not upside. Until that shifts, I do not think any type of medium-term investment in the markets is prudent.
The above from an intellectual standpoint is fascinating, to say the least. Much better than watching House of Cards:) More complex. And if possible much more treachery!
Back to the markets for me.
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
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