Bull flag Stocks: Stocks Will Perform Very Well Going Forward
The markets have reacted to Trump’s win in a positive light; as markets are forward-looking beasts the powerful rally illustrates that they at least view the Trump administration under a favourable light.
Trump’s decision to knock off two rules on the book for every rule created should contribute to creating a more friendly business environment. Many sectors will perform well under Trump, and we think Energy, Transportation and Banks will be among the top performers. All these sectors are already experiencing healthy gains; the banking sector could soar significantly higher as Trump will most likely gut Dodd-Frank Act. This will pave the way for banks to speculate and that will provide more a lot of fuel for one of the most hated bull stock markets in history.
This Bull Market is destined to last for years as it’s going to be fulled by lower interest will lead to a massive surge in the supply of hot money.
Bull flag Stocks: The Game Plan
In a previous article, we made the following comments and these comments still hold true.
From a contrarian angle (and not a political point of view) a Trump win could be construed as a positive development; non-contrarians will demand to know why? Mass Psychology clearly states that the masses are always on the wrong side of the equation. A Trump win will create uncertainty, and the lemmings will flee for the exits; markets will pull back sharply and viola the same old cycle will come into play. The cycle of selling based on fear which equates to opportunity for those who refuse to allow their emotions to do the talking. Tactical Investor
In general, we have stated for the past few years that as long as the trend is up, all substantial pullbacks should be viewed as buying opportunities.
Other random thoughts
We explore various topics that on the surface might appear to be unrelated but in reality they are all interconnected; Free market forces ceased to exist after 2008; the markets were never free, but any remnants of freedom vanished after the Fed decided to prop the markets indefinitely by forcefully maintaining an ultra-low rate interest rate environment. All the information today is manipulated; from the food, you eat to data you are provided. If you are aware of this, you can plan accordingly.
Identifying the problem is over 80% of the solution, and this is why most people do not know what to do because they do not understand the problem. Now you know why we are the only financial website that covers such a wide array of topics that on the surface appear to be unrelated but are in fact, deeply interwoven. Mass psychology is a very powerful tool, and if employed correctly can help you spot the abnormal levels of manipulation, the masses are subjected to. We strongly recommend that you take a look at Plato’s allegory of the cave.
Tactical Investor Update Aug 2019
The Dow has tried to trade above 26,800-27,000 ranges almost 19 months. Furthermore, these attacks have been widely spaced out. Hence, the Dow is now at an inflexion point”; it either blasts above 27,000 and in doing so former resistance turns into strong support.
Alternatively, if it fails to hold above 27K (after trading above it) the pullback could range from medium to strong. A medium pullback would end in the 25,500-25,800 ranges. A strong pullback could take the Dow all the way down to 24,5K (plus or minus 200 points).
In the short term, we expect the markets to be very volatile, however, the long term trend is intact. Hence all strong pullback should be embraced.
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