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President Trump and Americas Brexit; The Stock Market Crash That Never Was

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Posted by Sol Palha - Tactical Investor

on Friday, 11 November 2016 07:43

"Come to the edge," He said. They said, "We are afraid. "Come to the edge," He said. They came. He pushed them, and they flew. ~ Guillaume Apollinaire

In early October when the pollsters were all busy proclaiming that Hilary was going to win, we stated in an article titled Mass Psychology states Trump win Equals stock market buying opportunity that from a financial perspective a Trump win would present an excellent opportunity for the astute investor. We had made the same comments before Brexit became a reality, and it has been our theme that as long as the trend is up, all sharp pullbacks should be seen through a bullish lens. In other words the more substantial the deviation, the better the opportunity. Here is a small excerpt from the above-stated article:

Regardless of what you think of Trump, he is having the same effect as Brexit had on the markets but in smaller doses. If he should win the election, then the reaction will be several magnitudes larger. When the poll results came in stating that Hillary fared better in the 1st debates the markets responded positively and recouped their losses; this reinforces our argument of several years that says substantial pullbacks should be viewed as buying opportunities.

From a contrarian angle (and not a political point of view) a Trump win could be construed as a positive development; non-contrarians will demand to know why? Mass Psychology clearly states that the masses are always on the wrong side of the equation. A Trump win will create uncertainty, and the lemmings will flee for the exits; markets will pull back sharply and viola the same old cycle will come into play. The cycle of selling based on fear which equates to opportunity for those who refuse to allow their emotions to do the talking.

It turns out that the naysayers and doctors of doom sang the same old miserable song and instead of walking away with bags of cash, they were once again handed their heads on a platter. The action was fast and furious. The markets crashed, the dollar nose-dived, Gold took off, and oil dropped. It looked like hell was about to be unleashed, and then the markets reversed, and the momentary feeling of satisfaction the naysayers had was shattered. They were speechless as the markets not only recouped their losses but soared upwards; the action continues today; a clear validation of what we have been stating all along, that most of the advice coming from these so-called experts is on par with rubbish. The plot is always the same; scare the hell out of the masses and make it look like the world is going to end. Then trigger a strong reaction, and when the Crowd thinks the bottom is about to fall out, the smart money comes in and say's "thank you lemmings for giving us another free meal."

Take a look at the headlines before Trump was declared the winner

If Trump is elected president, it would be 'exceedingly harmful' to markets

The stock market could crash if Donald Trump is elected president

Economists: A Trump win would tank the markets

President Trump May Be Bad For Markets - Forbes

Mark Cuban Predicts a Stock Market Crash if Trump Wins

When we saw all this hype and nonsense being sold as news, we quickly fired an update to our subscribers stating the following:

This is Pavlovian programming at its best; the signal instead of a bell is a Trump win would be a disaster for the markets; the same signal was used to trigger the sell off after the vote for Brexit came in. It is a brilliant strategy, and it works all the time. Don't fall for this nonsense. We do not know who will win, but what we do know is that the top players are going to do everything in their power to trigger a significant reaction. In the end, all they care about is the reaction, and they will use whatever is necessary to trigger such a response. It is a game to them, to watch the masses stampede or turn euphoric. They trigger a reaction in both directions; hence always trade with a relaxed mind. ~ Market Update Nov 2, 2016

This brilliant and evil strategy has been employed for generations and probably predates the Tulip mania. The idea is to create a feeding frenzy or a stampede; in other words, the crowd always leaps and then looks. The crowd has been on the wrong side of this bull market since its inception, and that is why it is famously referred to as the most hated bull market in history. While the naysayers keep blabbering about how the next correction is going to be the big one; they forget that each pullback leads to a higher low and that when the market does pull back it is always trading above the targets they issued a few months or years ago. How do you think the naysayers from 2011, 2012 or even 2014 are feeling? If they held onto their short positions, they would have bankrupted themselves several times over. Thus it stands to reason that most of these guys are all bark and no bite. In other words, they talk but rarely act for if they did, they would be dead broke by now.

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Instead of crashing the Dow is on its way to put in a series of new highs.  There is a strong wall of support in the 17900-1800 ranges. Eventually, this support is going to move upwards, and 18200 should become the new floor.   The Dow needs to trade above 18650 on a weekly basis, if it can achieve this, then19K could happen within the next 4-8 weeks.

Conclusion



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Stocks & Equities

Dome Forces US Stock Market Lower

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Posted by Clive P. Maund

on Tuesday, 08 November 2016 08:18

Technical analyst Clive Maund takes a look at the current state of the U.S. stock market, and reflects on how the outcome of the impending election might steepen a decline. 

Maundcover 11-6-16

A number of subscribers have written in asking about the technical state of the broad U.S. stock market, which we haven't looked at for a while. With the failure of an important support level a few days back and the election drawing near, it's certainly a timely question.

We'll start by looking at a 6-month chart for the S&P500 index, on which we see that early this week, forced lower by the "distribution dome" shown, it broke down below important support. Ideally, we should have shorted it on its last approach to the dome boundary after the middle of October, but we missed the chance. Now it has already arrived at its rising 200-day moving average, which may generate a near-term bounce back up to the failed support; this is now resistance, where the market may again be shorted, perhaps by means of puts in something like SPDR S&P 500 (SPY). 

Here we should note that despite the 200-day moving average still rising, this is now a weak picture, for reasons that become clearer on the 1-year chart. In any case, if the market continues to drop, the 200-day moving average will quickly roll over and turn down.



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Stocks & Equities

The Market Reality for the Election Next Week

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Posted by Martin Armstrong - Armstrong Economics

on Monday, 07 November 2016 08:32

2016-Unknown"grab your socks. We are off for a bit of volatility. Keep in mind Trump would be great for a domestic market rally. Cutting corporate taxes to 15% will bring home $3 trillion to say the least. The Reagan Tax Cuts resulted in the Dow rising 600%. Tax increases, have ALWAYS resulted in declines. That is the blunt reality that Washington fights."

...continue reading HERE

 

...related:

Live From The Trading Desk: Raking in the Cash



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Stocks & Equities

Stock Trading Alert: SP500 At 2,100 Support Level - Make Or Break?

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Posted by Paul Rejczak - Sunshine Profits

on Thursday, 03 November 2016 07:02

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150, and profit target at 2,020, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The U.S. stock market indexes lost between 0.4% and 0.8% on Wednesday, extending their short-term downtrend, as investors reacted to the FOMC Rate Decision, quarterly corporate earnings, economic data releases. The S&P 500 index broke below its September - October local lows on Tuesday. It is the lowest since early July. The nearest important support level is at around 2,075-2,090, marked by some previous consolidation. The next important level of support is at 2,035-2,045, marked by the late June daily gap up. On the other hand, resistance level is at 2,110-2,120, and the next resistance level is at 2,150 marked by last month's local highs, as we can see on the daily chart:

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Stock Market Rally on FED Speak Today?

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Posted by Brad Gudgeon

on Wednesday, 02 November 2016 08:05

The chart below shows that we have the likely hood of staging a huge rally today in the stock market. In fact, the NASDAQ 100 could make a new high by Friday. The trines of October 30 and November 1 turned out to be exhaustion points in a down trend. The 5/10/20 and 40 week lows still loom ahead and are due sometime in mid to late month. Thanksgiving week could be pivotal.

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Brad Gudgeon, editor and author of the BluStar Market Timer, is a market veteran of over 30 years www.blustarmarkettimer.info

related:

Look At This Remarkable Chart As The Public Dumps Stocks! 5th Largest Outflow In The Past 10 Years!



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