We stayed up late to break down the Trump Speak and we feel the rally is still in order and rotation to Mid-Cap and Smaller market-caps is in the offing. Below are some take aways as we enter the post speech media cycle. Keep in mind we have 30 days left in Q1 2017 and money managers will be facing rising benchmarks and Warren Buffett telling them they suck. Somehow this always coincides with MLB’s Opening Day.
- Biotech is in great shape and we will likely see this sector grow no matter what happens in the economy. It is clear to us that Team Trump ( Goldman2) knows where to butter the bread as the election innovation economy is easily made transparent here. The Biotech Industry will be the recipient, and this was a total telegraph by Gary Cohn that you can load the wagons. It would be too obvious if Goldman (GS) starts tweaking the Biotech Indexes higher after establishing a trade on the Cohn Telegraph.
- Team Trump seems to be trying to Jawbone the Cannabis markets lower using war on drugs terminology like epidemic and addiction clearly to satisfy some campaign promises to the right, and it isn’t working. At least not for stocks we watch- after an initial sell off – investors and algorithms were back on the buy-side evidenced by bell weather stocks. Click here to learn more about how we manage these portfolios and what we think is important in the Cannabis 2017 Trade.
- Trump had firm optimism and looked Presidential – surprising many. He only had a few moments where he did the Jimmy Two Times where he says “Get the Papers – Get the Papers”. We have our own Trump Two Times where he will repeat a silly phrase for emphasis, and here it was the De-Regulation theme where (1) regulation created causes (2) to be removed. In the future in any Trump Speech our President will deliver the message in a Jimmy Two Times fashion so pay attention. His team does not look in disarray, it just looks new. Watch the YouTube below and think of the Trump cabinet..listen to the names. I Love It !!
- The 8 Year Bull Run has created this overbought situation where any money manager must buy downside protection and then manage the consequences of markets going higher. It happened again last night where all the thinking goes into the hedge, and all it has done in 2017 is lose money. A bunch of smart ass quant kids will get fired before summer.
- Technicians are pulling their hair out because the market has no recognizable pattern. If they tell you they have one they are lying. The recent rally confounded everyone across all technical models.Retail Investors are heading back into the market in droves, so this means we could be near a top. We think legislation will not affect markets and investors should be focused on sector themed specific trades in lower marketcaps.
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