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As for the markets, the bears (like me) have been getting their heads beaten in every day since May 3rd. No matter what the news is, good, bad, or inconsequential, the markets go up. Even if there is a big drop during the overnight session, it’s long gone by normal trading hours. I see no reason for this to change.
Trump is utterly unpredictable, and who knows what this NoKo Summit will bring. But at this point, he could throw cold water in Kim’s face, flip him off, storm out of the room, and the market would STILL rally due to Trump’s “bold stance”. More likely it will be all love-dovey, this-is-the-end-of-history, we’re all friends, and they’ll issue a glowing press release. The point is that bulls are going to keep getting handed free money with no risk.
It will take very little to pour accelerant onto the flames the bulls have been lighting. The gap figures are shown on the S&P 500…….
…….and the Dow Composite:
No such figure is needed for the small caps, as they have been in Lifetime Highs Every Day Mode for quite some time. It’s quite obvious now that early February 2018 was exactly like early February 2016 – – a cruel, cruel joke played on the four bears left on Earth.
The one and only shining star for me remains the Utilities, which continue to break down magnificently. I am up-to-the-eyeballs deep in January 2019 XLU puts, and my profit goal on those is……….large. Wednesday, of course, will be a pivotal day for interest rates.