Trump Stock Market
As this update is coming on the back of a very recent update, there is not much to be said other than the money on the sidelines continues to grow, politicians continue to behave like morons and individuals continue to wear their emotions on their sleeves. Educated individuals have now descended to the level of apes, possibly even lower and unless you watch the show from a distance you risk being drawn in. So let’s examine a host of random topics today
Investors panicking; Could this mark the end of the Trump Stock Market Trend
So according to the specialists at Lipper, investors panicked and pulled out over $40 billion from equity funds over the past few weeks. This is one of the largest drawdowns since 2016 and we all know how well the masses fared after that wise decision. Now add this data to what we have presented over the past three weeks and as the trend is showing no signs of weakening, its means if the market pulls back you should jump up with the joy and buy; if there is a very strong correction, back the truck up.
Politics and the Markets
We have been asked time and time again about what candidate or party we would support. Let’s start by stating we never allow our personal views to infect or prejudice our outlook that is a recipe for disaster. The players on both courts can be described as lobotomised individuals with drug-induced dreams of creating a brighter future but without a meaningful plan to bring these dreams to fruition.
Almost every politician is trying to look good instead of doing what is good for the nation; in the process, these politicians look more and more like snakes and hence, the low approval rating. If we were to ever endorse a politician it would have to be someone like Ron Paul, someone who favours the libertarian outlook, looks to control the debt, reduces our interference in foreign nations, tries to implement some hard money policies and most of all tries to improve the country instead of trying to help the corporate world fatten their wallets. However, the odds are stacked against such a person, and so it’s wishful thinking even to entertain the thought of someone like this taking the reigns of power.
So we are left with choices that fall under the category of bad or incredibly bad; which brings us to the saying it’s better to deal with the devil you know than the one you will be forced to discover. Taking the observers perspective, and following the rules of trend analysis and mass psychology, the markets seem to favour a Trump Win. Pay attention to what we have just said as this is not an endorsement, this view is based on mass psychology and trend analysis.
If Trump Does not Win: Is this the end of the Trump Stock Market Bull Run
Now if Trump does not win, what does that mean? Absolutely nothing (as far as we are concerned) in the grand scheme of things and we would not lose one night of sleep over it. We would move onto Plan B; life goes on with or without you. However, there could be a civil war like event if he losses and you already know why, so there is no need for us to discuss this topic. For those of you that don’t; well, here is a hint; this country is deeply divided into red and blue sections, and the red section is quite large in terms of size. The blue section is large in terms of population density. When two hot heads clash, all hell breaks loose, and the animosity between these two groups grows by the day.
Until the trend changed in China, we were silent on china,
Because the trend favoured them and we don’t like to waste time on empty rhetoric. The same line of thought applied to our stance on the precious metals sector. Even though we favour hard money principles we are wise enough to know that it’s fools dream to think anyone in power will allow such thoughts to gain traction. That is why we diverged from Gold in 2011, much to angst of the Gold Bug and Hard money communities; they falsely assumed that our stance from 2003 to 2011 when we were extremely bullish on the sector indicated we were gold bugs.
We are not Gold bugs, technology bugs or any bug for that matter. We are trend players, and if the trend turned bullish on peanut vendors we would embrace that sector. So from a financial perspective, a Trump win will be bullish for the markets, and that’s the same thing we said back in 2015.
Will Trump Win?
That is another story, but the hidden support we are tracking remains unchanged, and that hidden support could be as much as 20%. As we stated his biggest drawback is his big mouth. If he were to cut back his rhetoric by 50%, his likability would probably rise above that mark. However, it seems an impossible feat; he seems to take a perverse delight in slugging it out. Therefore, even though the show looks wild now; we can quite comfortably state that we are only at the appetiser level. The stench from this all-out catfight is going to get so bad that a skunk in comparison will smell like a rose.
Regardless of whether he wins or not the Trump Stock Market Bull is not because of Trump but because the trend is bullish. When the trend turns negative this bull market will end regardless of whether Trump is in power or not.,
Random Notes on Investing and the Markets
Options can yield huge gains, but they can lead to painful losses, don’t over-allocate funds and understand that you are taking on higher levels of risk. Hence the saying no pain no gain. There are two ways to mitigate the risk; use only profits or cut back on the rubbish you don’t need and use that money to take a shot at options. Technically this is money you would have already thrown into the garbage. For example, instead of paying for a package tour, create your vacation package. Instead of buying a new car, purchase a very good used car; instead of eating out four times a week, reduce it to twice or less and so on. All this dead money can be given a new lease on life by deploying into something like options that could potentially lead to huge wins.
When it comes to taking profits, we put a list of suggested profit targets for subscribers to choose in the passcoded section. One suggestion is to choose a profit target for stocks and options for half your holdings and stick to it. For example 30% on stocks and 100% on options. Remember no one ever lost money on banking profits. We have a strategy in place that is based on risk to reward ratios and the pattern of the stock, but one strategy cannot cover everyone’s needs, and that is why we put up the info on taking profits in the passcoded portion of our website.
A quick look at the Dow
The weekly chart of the Dow Diamonds indicates that the MACD’s have now experienced a bearish crossover. Does this mean you need to panic? Not all, there are many instances where the markets do nothing, but if this market pulls back strongly, then there should be no hesitation over your next move; panic should never enter into the investment equation.
A Tactical Investor refuses to panic even when it looks like there is no reprieve in sight, for history indicates that panicking never pays off when it comes to the markets. The masses were, are and will always be prime cannon fodder candidates; they are hard-wired to panic and when they do the outcome is never good. Examine any panic based event, and one thing stands out like a sore thumb, the masses always took a beating.
The Bearish MACD crossover is taking place in the minimum overbought ranges and long term this means that the Dow is going to trade in the extreme to insanely overbought ranges for an extended period.
Random thoughts on Trump and The Markets
The media and large portion of the crowd are mistakenly assuming that the current state of affairs is due to Trump being president. Trump is part of the trend; he does not create the trend and if he had opposed the trend he would not have been elected. On the same token if he had tried to run for president in 2008 or 2012 he would have lost, as the current trend was not in motion at that time. The country is now firmly divided into two camps and polarisation levels while high, will continue to skyrocket. This is a perfect environment to manipulate the masses as the crowd is so worked up, they don’t see all the other nonsense that is taking place right in front of their eyes.
Laws will be passed for example to make it as easy for individuals to borrow money as they were able to do so in the era of “liar loans”. This will provide additional fuel for the stock market; when people feel good they are ready to gamble. The financial crisis of 2008 was the direct result of the banking industry making it extremely easy for individuals who would never have qualified before to buy a home. Eventually, this money will find it’s way into the stock markets and this will lead to the last explosive move up before the markets experience a spectacular correction.
Market Update March 2020
The reason the markets have overreacted to the Coronavirus is because of one simple factor; weaponised news. The crowd is being driven by fear as opposed to logic, hence the strong market reaction, but that reaction will be even stronger to the upside when this fear finally subsides.
Every bull market experiences at least one backbreaking correction that is falsely mistaken for a market crash. The current correction could morph into a backbreaking correction. To be classified as a backbreaking correction, the market has to shed a minimum of 20% from its highs. The good news is that every backbreaking correction leads to an even stronger upward move.
Now given the intensity of the current sell-off, the markets are likely to mount a rally, the first attempt usually fails, and if history is to be trusted then when this rally fizzles out, it should lead to another downward wave, that could take the market to new lows on an intraday basis. If the pattern is strong enough, we could issue either a short term put play or open up strangle position. This is where one opens up both a call and put but with different strike prices.
Don’t forget to keep a trading journal; the best time to take notes is when blood is flowing freely on the streets.