Wow, what a night!
We’re having technical difficulties this morning and are unable to post our PSW Report but it is available to our Members in our Live Chat Room HERE as well as below (poorly formatted):
Hopefully we’ll have this spot fixed shortly.
Overnight, we lost the “adult in the room”, Gary “Moe” Cohn, as he quit the White House rather than pretend he was in favor of the trade tariffs. I’m sure Cohns everywhere are breathing a sigh of relief that their names won’t go down in history next to Smoots and Hawleys in the annals of poor economic decisions. Speaking of anals – Stormy Daniels is suing Trump – just had to mention that! Meanwhile, in referring to the 1930 Tariff Act, I noticed the full name of the Act was:
“An Act To provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes.”
I guess the long name for the new Tariff Act should be the “We never f’ing learn Act of 2018, where the American people fall for the same dog-whistle BS over and over again for the purposes of distracting them from a massive criminal investigation of pretty much the entire White House.”
As I said to our Members this morning: “As to Cohn, I think the panic is over losing the adult in the room. Now it’s like the 3 Stooges came over to do your plumbing but Moe quit. The whole job was going to be a mess but at least, with Moe, there was a chance that it would get done. Now there is no chance and things are likely to get much worse. ” That’s why the market are freaking out this morning, with the Dow down over 300 points.
Overall, this is the kind of panic we see when a company loses its CEO – people sell into the uncertainty. Trump could fix this by appointing someone like Warren Buffett or Janet Yellen to be his Senior Economic Advisor but he’ll more likely choose a spineless toady like Larry Kudlow or the current head of the Council of Advisers, Kevin Hassett, whose primary claim to fame is publishing “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market” in 1999.
Speaking of the Dow, you’re welcome for our fabulous idea to short the Dow (/YM) Futures at 25,000 in yesterday morning’s Report – the Dow hit 24,400 overnight and each short contract gained $3,000 for the day but we flipped long in our Live Member Chat Room overnight at 24,500 – a bit early but now those are paying off as the Dow moves back to 24,600 – up $500 per contract on the bullish play already.
The key to our bearish call yesterday was exactly what we charted out in the morning (using the same charts we used all last month) with the S&P (/ES) failing our 2,728 line yet again and having that line act as a firm upside barrier all day long gave us the confidence to stay short into the close:
Oddly enough, the Russell (/RTY) is already back to it’s shorting line at 1,555 as the Dow crosses over 24,600 (which is now the stop for our longs) but we’re not going to short the Russell just because it recovered first. It only fell to 1,540 for just $750 per contract gains by 11am but then took off so it’s a “no play” now and mostly we’re just watching to see where things settle down today before making new bets.