The Mueller Probe Isn’t Over – It’s Just Starting
When Robert Mueller released his two-year long inquiry into the 2016 presidential election and what part Russia had to play in it if any, some people thought that the inquiry would finally put to rest the results of the election. Were they wrong! Far from ending the two-year investigation and the vindication of the Trump administration, the good stuff is just starting. As soon as the Attorney General, William Barr said a redacted version would be released to protect national security, the race was on.
President Trump and the Republicans immediately claimed victory on all counts saying the “witch hunt” was now over and we could go on with the business of government. There was no question in their mind that the election had been conducted without any interference from outside sources, mainly Russia and President for life Vladimir Putin. However, in the release Mr. Mueller said that the 2016 election had not violated any U.S. laws, but added that there was probably not enough evidence to prove any crimes other than the people who had already been dealt with.
He might as well have said after two years he is not sure what happened, who caused it to happen, and when it did happen. Immediately the Democrats took that opening and said that not only was the probe not over, but this was just the beginning of a new probe that would feature the Justice Department and Attorney General William Barr. The new circus began with Speaker of the House Nancy Pelosi firing the first shot. She said that the Democrats were not interested in seeing a version that was redacted “to protect national security”. They want the full report and they want it now. They feel that Mr. Barr is being “condescending and arrogant” to think that the Democrats could not interpret the information and form their own opinion as to when phase two of the report will begin. The Republicans fired back that the report concluded there was no collusion and ask for the redacted version to be released when Mr. Barr had sufficient time to screen the report.
If you can’t see where this one is going you must be blind. No matter what the report says the House will vote for a new investigation to start immediately naming all the usual suspects. The Republicans will counter that it is a plot that will be orchestrated thru the Democratically controlled House Intelligence committee and demand that the chairman resign and on we will go for another two years of grid lock. Nothing will be done by either party to support the needs of the American people and AOC will say there is no need for an election in 2020, her “Green Deal Platform” should be passed by the House of Representatives and she should be appointed as the new President. Get set for two more years of a continuing farce.
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions with a short paragraph which will cover the trading subject.
Question: Do horizontal spreads present unlimited risk?
Answer: Horizontal spreads can have unlimited risk if they are put on with a short ratio. But vertical spreads would have the same risk if they were put on as a short ratio. It is the same with straddles and strangles and the writing of naked puts and calls. They all present unlimited risk if you do not buy an equal or greater number of long options. If you buy a horizontal with a debit your risk is limited to the amount of the debit. If you put it on as a credit your risk is limited to the credit minus the strikes involved. So, remember as long as the horizontal spread does not have naked options, your risk is limited.
The Wise Guy Report: The View From The Floor
Each week I talk about what I think the Wise Guys (floor traders) are up to with the Big Three commodity contracts: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). I also track the Market Edge (www.marketedge.com) ‘Market Posture’ which has a twenty-six year record of forecasting the intermediate-term direction of the stock market as measure by the DJIA with around 70% accuracy.
T-Notes
After making a flight to quality high last Friday the ten-year continued to move higher and when it took out the Friday high it was time to look for another spot to trade. The trade was taken off with a stop of 124.10. The market still feels like this is a blow off top because the vertical price movement will not be able to be sustained. In addition, the VIX is falling back to the bottom of its long term range both of which point to a high but if you don’t stop yourself out then you are always looking for a problem. We will begin searching for a new spot to enter the market T-Note market.
Crude Oil
The market seems to be taking a breather after a substantial run to the upside or it may be running out of steam. This past week saw new highs but as soon as they came in, the market fell back in what is starting to look like a congestion pattern. This trade has been a nice winner and if it should violate downside support it would be a good spot to cash and look for the next move. On the other hand, if it continues to look like a trend we will stick with the trade.
Gold
The contract made new near term highs on Monday but just as quickly as they came in it started to fall back into the congestion pattern that has been forming since the recent February highs. On Thursday it had its biggest selloff in six weeks, and it looked like it was going to fall back to support. Friday it opened on the high tick of the day but was unable to sustain any positive price action. It did close the week above Thursday’s low and is still above long term support. Until it violates that level we will stick with the trade.
| The Big Three Commodities Contracts
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Market Edge ‘Market Posture’
| Market Timing Models | Current Reading | Prior Week | Connotation | ||||
| Cyclical Trend Index (CTI): | -3 | -2 | Negative | ||||
| Momentum Index: | -3 | 2 | Neutral | ||||
| Sentiment Index: | 1 | 1 | Neutral | ||||
| Strength Index – DJIA (DIA): | 31.0 | 31.0 | Negative | ||||
| Strength Index – NASDAQ 100 (QQQ): | 31.4 | 18.0 | Negative | ||||
| Strength Index – S&P 100 (OEX): | 35.4 | 21.3 | Negative | ||||
The Market Edge ‘Market Posture’, Bullish since the week ending 1/04/2019 (DJIA – 23433.16) was downgraded to Neutral the week ending 03/22/19 (DJIA – 25502.32) and remains Neutral at this time.
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