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We have been talking about how bullish the US stock market is. It has been bullish uninterrupted for most of 2016 and that includes the Brexit buying opportunity. We then expected and got a test of major support. Now, with the Trump whipsaw and reversal we have the 2nd thrust in breadth and breakout, after Brexit. Here’s the broad market view we keep tabs on. It never went bearish. All it did was test support across various indexes.
I’ve made a conscious decision to pretty much move on from the silliness of Trump towers, erections, pants tents and other Trump-centric commentary after having fully wallowed in it last week and incorporated it into NFTRH 421, which is a serious piece of work that also worked in these themes. I am actually very concerned that we have put an unqualified spectacle in the White House; a product of American TV and leveraged ‘capitalism’. A media star.
Here is a screen shot of page 41. It’s the Society of the Spectacle.
This is the opening segment to this week’s edition of Notes From the Rabbit Hole, NFTRH 421, a 48 page work-through of the immediate post-Trump landscape. While we had fun with the Trump hysteria throughout an ultimately serious analytical report, I look forward to marinating in the post-hysteria atmosphere and coming up with well defined market directions, whether they be born of new macro fundamentals to be, or contrary sentiment driven possibilities, which are also in play…
People who have read me for years know that all sorts of buzz phrases (Inflation onDemand, Armageddon ’08, etc.) and some off color writing can find their way into my work, especially when writing publicly. I do not think highly of the Federal Reserve system, the average politician or even many US Presidents through my lifetime. Formally, I do respect the office and ultimately by extension, even a President I may not happen to like. It’s been that way much more often than not, after all.
There are more Trump Towers being erected by certain indexes (ref. Uncle Buck’s pants tent noted yesterday in an HUI update). As an aside, say what you will about the man, but the name and the persona are a natural for we financial writers and others not tasked to be sensitive about politics or politicians. I mean, how much fun could one make of Obama, a person who comes across as dignified and idealist? Bush was a little better, but even he was no Trump. The Clintons? Getting warmer. But Trump is a new thing all together, almost transcendent; more concept than man. I like this, speaking as a writer. Love it, actually.
On a more serious note, I think he is eventually going to be seen in a lesser light, as the true believers who thrust him upon their tired shoulders find out that promises are one thing and reality is quite another; if anything, he will deliver inflation, which adversely affects… anyone? Bueller?… the middle and lower classes. Asset owners – like Trump – always win and those who go paycheck to paycheck, always lose in inflationary/reflationary regimes. So if the hype proves true and exported jobs are repatriated, roads, bridges and walls are erected, tax breaks for big corporations are implemented and yet more deficit spending is enacted, it is not the true believers who are going to benefit.
HUI has been targeting as low as the gap at the 180 area for months now, since losing the 50 day averages. I may have shown this chart once publicly, can’t remember for sure. But it is one of a few that we’ve used to manage the process of a correction that was well earned (please, save the conspiracy theories).
