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Swing-trade: Friday stock market rally reverses Thursday impeachment panic

Written By | Nov 1, 2019
swing-trade, impeachment panic

Cartoon by Garrison. Reproduced with permission and by arrangement with grrrgraphics.com.

WASHINGTON – Thursday, stocks took a swan dive after reluctantly rallying Wednesday in a positive reaction to the Fed’s interest rate cut. The reason for the Thursday drop, according the financial punditocracy: Worries that the hoped-for mini US-China trade agreement would never, ever happen. The real reason, however, was one the media didn’t mention: The market was down due to Trump impeachment panic. Swing-trade time again.

A little dab of Chi-com trade propaganda disrupted Thursday’s markets?

ZeroHedge led on Thursday with the Party Line version of Thursday’s events.

“US index futures all reversed sharply, wiping out most of the post-FOMC gains, and Europe’s Stoxx 600 turned lower, with basic resources, energy and autos leading European indices into the red after Bloomberg reported Chinese officials have warned they won’t budge on the thorniest trade issues and remain concerned about ‘Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks,’ a report which frankly said nothing new, but seemed almost a hit piece designed to kill any upward algo momentum.”

Don’t you wish our guys could do propaganda like those Chi-coms? But again, this is all balderdash. It’s all about impeachment panic.





Also read: The Fed, China, and the Trump impeachment farce perplex US stocks

Actually, it was the Dems’ choreographed phony impeachment vote that scared Mr Market

Forget China. Instead, recall the totally partisan House voted Thursday to “formally” open up the Trump impeachment “investigation.” So Thursday’s swing-trade drop was not due to China at all. It was due to the lack of government sanity in Washington. It was caused by momentary and irrational impeachment panic.

Never believe the fake news. It can be fatal to your portfolio. That said, however, it looks like both high-speed machines, their headline-friendly algorithms, and a batch of panicked investors dumped stocks Thursday by the boatload.

Machines and large investors make for a bi-polar Mr Market

I’ve mentioned the weird Wall Street mentality towards the Trump Presidency many times in these columns. Wall Streeters, business owners and CEOs big and small mostly love this Administration’s powerfully pro-business policies. Yet a likely majority of these obtuse DBs fund the campaigns of his Socialist opponents, either out a passionate desire to virtue-signal, curry favor with the left so their businesses won’t get virally boycotted, or simply because they can’t see the illogic of what they’re doing.

But Thursday’s impeachment panic swing-trade action demonstrated to the illogical investment community that the lift-all-boats Trump presidency is on the line. Now, Wall Street investors, whether CEOs or not, are suddenly focused on one terrifying thought. Namely, by January 2021, investors big and small could be dealing with a President Bernie or a President Fauxahontas. In other words, it’s decision time, you idiots.

Trick or treat for Wall Street’s Idiocrats and high-speed machines

Fact. The House voted to continue their smear campaign against the President in public, cleverly disguising the action as a fantasy impeachment “inquiry.” The vote serendipitously occurred on Halloween, wouldn’t you know? Amidst that little irony, investors finally faced the reality that if they didn’t wise up and see that Thursday House vote for what it was, they’d be sacrificing their Trumpian treat for the Democrats’ disastrous economic trick not long after Halloween 2020.

Even the thought of this made machines and individual traders and investors alike hit something like Jim Cramer’s “Sell-Sell-Sell” button. And so, the Thursday dump-a-thon was launched, reversing Wednesday’s rally. If you’re an active investor, surely you’ve noticed that it’s sort of been that way with your portfolio recently. In fact, it’s been that way for months now, starring the fall rally that just can’t seem to get up a big head of steam.

The bulls take the market back on All Saints’ Day

But today, now that Thursday’s brief panic has subsided, the bulls are back on Wall Street. At least for a day. The Street’s animal spirits were released Friday morning by a positive weekly job report from the government. But continuing, moderately surprising positive earnings from a slew of influential companies gave the lie to the impending recession narrative that Democrats are trying to promote. Another swing trade.

But Trick or Treat goes on

The idea behind campaigning for a recession is to scare the country into causing an actual recession. Against its own best interests. How? By scaring consumers and businesses, causing to park all their available cash in a 0.1 percent interest-earning checking account rather than invest it or splurge on a big cache of Christmas presents for the family.

Hence, nobody buys anything. Companies lay off lots of Trump voters after Christmas. The economy (unnecessarily) grinds to a halt. And all those once-happy Trumpsters vote against Orange Bad Man next November. The Deep State scores!

But after that big, phony House vote yesterday, it finally became clear, to at least those who still know how to do logic, that this  aim of the Democrats’ run-out-the-clock stunt is transparently obvious. As a consequence, their hoped-for grand finale will likely die a fairly quick but still painful death once the fatally fractured party’s non-case for impeachment goes to the Senate.



So today, we’re getting a relief rally. Another swing-trade. One that has absolutely nothing to do with China at all.

In other words, anyone who wants another 5 years of Trump-onomics (including 2020 itself), even if they don’t like the President himself, saw the Democrats’ empty kabuki theater production for the phony charade it was and is on Thursday. So today, we’re getting a relief rally, with the Dow comfortably rallying by 230 points or so as of 3 p.m. ET, with an hour to go before the closing bell.

Will we get another swing-trade escapade on Monday?

God knows what we’ll see Mr Market do on Monday, given a weekend’s worth of what will certainly be “Bombshell Revelations” leaking steadily out of The Swamp. But at least we’re having fun with today’s latest edition of swing-trade sweepstakes.

swing-trade

This image represents the Catrina, a female character representing the dead created by Guadalupe Posadas. Image via Wikipedia entry on Day of the Dead, CC 4.0 license.

Markets continue to run on fumes and political news these days, fake or otherwise. Yeah, earnings reports do count. For a day or two after they’re issued. But machines still drive trading on US markets as we begin the month of November. And (mostly) fake headlines, not P&L statements, are what the machines are always searching for.

Consequently, today’s jobs numbers looked happy. So we find ourselves reverting back to Wednesday’s rally mode. Until our next bout of impeachment panic trading.

The wrap

This is a hell of a way to invest. But it’s what we have, so we deal with it. I try to keep you up to date on the political waves that continue to drive this market’s uncertain rally. At least most of the time. I don’t see any of the well-paid blow-dried pundits doing this.

To wrap this column up, since Mr Market is closed Saturday (The Day of the Dead, BTW) and Sunday, let’s all plan to forget all of this for at least a couple of days and get those leaves raked up. Before another frigid winter blast drives us inside again, courtesy of global warming climate change.

– Headline image:  Cartoon by Garrison. Reproduced with permission and by arrangement with grrrgraphics.com.

 

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17