Stock Market bull will go ballistic under Trump Administration

Stock Market bull will go ballistic under Trump Administration

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; 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 fuel for one of the most hated bull stock markets in history.

We are going to look at two stocks that we think could do well in the years to come.  BAC (Bank of America) and SAIA  (SAIA Inc) are two stocks we picked from the banking and transportation industry that have already rallied strongly and should continue trending upwards.

saia-1

In less than 8 weeks SAIA has soared and tacked on more than 30%; the momentum is strong and as long as the trend remains positive, this stock is likely to rally much higher.   There is a strong  layer of resistance in the 42.50-44.00 rangess. A  weekly close over this level should put in a position to  put in a series of new highs.

Bank stocks Rally strongly on a Trump WIn

In the  banking sector, we have Bank of America, a stock that has rallied very sharply over the past few weeks, tacking on gains of over 30%.   The stock is trading at  three-year highs and the long-term outlook remains bullish. All strong pullbacks should be viewed  through a bullish lens.

 

Conclusion

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.

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