This Is Getting Absurd!
If you thought last week was goofy in Washington you were only seeing the beginning of the insanity that can only happen there. The current episode started when Nike decided that they should pull a special shoe that was made as a tribute to Betsey Ross and the original flag. Colin Kaepernick, a failed football player and an advisor to Nike found the shoe “offensive” as it was a time when slavery existed. He convinced the company to remove the shoe from the market. Apparently, no one bothered to research Ms. Ross or they would have found out that she was extremely outspoken against slavery!
Then the “big four” freshman congresswomen said that Speaker of the house Nancy Pelosi, was also a racist and that action needed to be taken on that front. Mr. Trump tweeted that although he and the Speaker had many differences in opinion that Ms. Pelosi was not a racist and the “big four” owed her an apology. This created a new wave of Mr. Trump being called a racist and in fact Rep. Al Green (D. Texas) said enough was enough that Mr. Trump was not fit to be president and that he needed to immediately be impeached. This is the 3rd time Mr. Green has called for his impeachment; however the vote didn’t quite do what he expected as it was defeated by 332-95.
Mr. Trump and Ms. Pelosi have enough political savvy to know that the political impeahment will just end in an acquittal in the senate and that this one could backfire on the Dems. Mr. Trump is goading the Dems as he sees this as a chance to really load the boat for potential middle of the road voters and this will almost surely seal his election in 2020.
And finally, the best. California governor Gavin Newsome is supporting a new bill in California 27B which would eliminate a candidate for president from being on the primary ballot if they did not allow their Federal Taxes to be made public. The last time a candidate for president did not reveal their Federal Taxes was Gerald Ford and no one cared. So, if this passes what is the next move deciding whether a candidate should be allowed to run for president in that state or better yet why bother with elections? The ruling party in the house of representatives simply appoints the next president.
Wait till the Mueller report hits on the 24th. Get the tents up because you will not want to miss this three ring circus!
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.
Someone told me I can write put credit spreads to hedge my portfolio. Is that right?
Answer : As the option markets have evolved over the past 25 years, the use of weekly options has gained acceptance. This allows many investors the chance to use weekly credit put spreads in combination with longer based serial puts to create a synthetic short position in the market that has very little or no time decay. This wasn’t possible even five years ago, but it is now a strategy that I teach to students that want to learn advanced trading and protect their individual stocks or portfolio from downside risk.
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
It was another week of congestion as the market digested the news from around the world. It now looks like the cut will be .25 basis points. We should expect some price action after the Fed meets and they decide the next direction that the market will take.
Crude Oil
After a week of upside action crude closed lower on the week. Even with the problems in the strait of Hormoz and the Iranians confiscating a British tanker claiming that one of their tankers was stolen as part of the economic sanctions, the market had a dull week. This despite a move by British war ships which moved in to protect their interest. I am still long Crude but if it violates near term support, I will take profit and look for a new opportunity.
Gold
Gold is now in a volatile congestion phase at the top of the current market. It traded down on Friday after making new yearly highs. This could be a volatile congestion area that will find a breakout in a large range. I am looking to see the breakout occur before I am going to initiate a new position.
| The Big Three Commodities Contracts
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| Market Timing Models | Current Reading | Prior Week | Connotation | ||||
| Cyclical Trend Index (CTI): | 2 | 2 | Positive | ||||
| Momentum Index: | 2 | 3 | Neutral | ||||
| Sentiment Index: | -1 | -2 | Negative | ||||
| Strength Index – DJIA (DIA): | 70.0 | 63.3 | Positive | ||||
| Strength Index – NASDAQ 100 (QQQ): | 78.4 | 80.4 | Positive | ||||
| Strength Index – S&P 100 (OEX): | 75.3 | 68.0 | Positive | ||||
The Market Edge ‘Market Posture’, which has been Bullish since the week ending 04/1819 (DJIA 26559.54) remains Bullish at this time.
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