But renewed hope taxes will get done went a long way in getting us to this point. But we are still in a season of high risk and only a week away from the sweet spot in this long-term cycle as we will hit 233 trading days to the Trump rally. The question is what could derail this rally? There’s always the unknown which is why the swan turns black. But looking at the bigger picture we must keep an eye on Catalonia right now where the vote Madrid tried to stop voted for independence with a whopping 90%. Then we have plenty of internal issues. The NFL problem is not going away yet and I saw a NY Post story on Sunday morning suggesting the financial market is getting fed up with the protests. There are some on the financial market who are starting to organize boycotts if the protests don’t stop. While the stock market remained strong and suddenly oil stocks became a major player in that conditions may change this week because bears got the near term upper hand on the oil chart.
Oil put in a bearish engulfing/evening star type formation at 162 bars on the 180-min chart. I feel more comfortable when I get my calculations on the hourly chart but here’s what it might mean. Calculations, vibrations and square outs are nothing more than mathematical representations of human emotion. When I see this lining up on a 180 chart it represents these are traders more committed than intraday but not quite as committed as daily or weekly longer-term players. It means oil could take a break all week. That would slow down the stock market since they’d likely lose the oil stocks. It did start lower on Monday morning.
Did you see Antifa block traffic on Los Angeles freeways in the past week? They are threatening trouble on November 4. It was serious enough Drudge linked to the story. I don’t think they pose any threat to the republic but they can cause more social unrest we don’t need at this point.
What I usually do is write most of this report on Sunday night and finish it on Monday morning when the market opens. Everything above is from Sunday night. I woke up on the left coast to the shocking news in Las Vegas. As the trading community knows, we had many good times at the Mandalay Bay over the years at the Traders Expo so this one hits on a personal level. At this stage of the game early Monday morning it’s hard to know who is responsible for this but after an event like this one must take all the warnings seriously. Stuart Varney asked Art Laffer if he believed there was a link between morality and money since the early indication of the market was higher. Laffer said there might be but it wasn’t likely immediate. That’s right, there is a cumulative effect and nobody knows how many drops the bucket can absorb until it starts to spill over. My sense is we are very close. This heinous act appears to be have been well planned out and it would be hard to imagine he acted alone. According to David Knight, there appear to be two different windows shot out so there may have been more than one shooter or it was a very large room with multiple windows.
If you are asking me why I think the market is higher in the face of this shocking news it comes back to the historical complacency we are experiencing right now. The delusional crowd does not care to take these threats seriously until it becomes personal. What would that look like? Let’s just say fear takes over and people stop flying like they did after 9/11. Let’s say people back off from going to places like Las Vegas or even places where large crowds gather. That includes sporting events and concerts. Like many people, I keep my thoughts to myself but I’ve long been amazed there hasn’t been an attack like this on a sporting or concert venue in this country to this point. It happened in Paris, Manchester and now it hits home in the ultimate vacation spot, Las Vegas.