We’ll start by saying that if it turns out be true that President Trump played a large role in getting the Big 10 to reinstate their football season, the election in over! Given how important college football is to the people of Michigan, Ohio, Pennsylvania, Indiana, Iowa, Illinois, Minnesota and Wisconsin...if the President is the reason they got their season back, he’ll win EVERY state in a landslide!
Okay, we’re not serious about that last comment...but we ARE serious about our next comment: Stop blaming the Fed for yesterday’s reversal in the stock market and this morning’s decline in the futures!!! We are hearing some ridiculous explanations this morning as to why the Fed is to blame. In reality, they could not have been more dovish yesterday. So the real reason we’re seeing some renewed weakness is because the market was already ripe for another leg in the recent decline...and nobody wanted to sell anything in front of the Fed’s announcement. Now that the Fed is behind them, they’re starting to take profits once again.
As we have been saying for two weeks now, whenever the stock market gets to the kind of extremes it reached in early September...in terms of being overbought and overvalued...it always declines in several waves...to work-off those extreme conditions! Therefore, we predicted that this week’s bounce would only be a very short-lived one...and we’d see another “wave” lower before this decline found a bottom. In other words, what is taking place right now is nothing more than the normal (and healthy) process that we always go through after the stock market reaches the extremes it did in late August/very-early September!
Yes, there are always a bunch of propeller heads...who never worked on a trading desk...who always try to come up with some sort of ...