As I write the next issue of Street$marts, there is a lot of Donald Trump included. Not so much from a political standpoint, but more how he is impacting the stock market and economy. It’s really been amazing that every single meeting I have with clients and prospects, the Trump question is the first one asked.
As you know, when it comes to investing, I have a strong contrarian side to me. As the late Joe Granville once said, “if it’s obvious, it’s obviously wrong”. No one can argue that stocks have been on an historic run. For almost a month, study after study has pointed to a pullback, but one has simply not materialized. That’s called strong momentum or a “creeper” market, one that just keeps creeping higher day after day.
Until today, our models remained green with all systems go. That has changed.
The higher stocks have climbed, the more people have seemed to hop on board, something I have discussed for years on CNBC and Fox Business. I often joked at Dow 12,000, 14,000, 16,000 and 18,000 that we should watch Dow 20,000 for signs of investors finally buying. That turned out not to be such a joke.
Anyway, presidents typically do not comment or answer questions about the stock market. That’s an unwritten rule. However, President Trump seems to be blazing a new trail. Yesterday, he sent the Tweet below.
That Tweet by itself is shocking, but remember, this comes from a man who sold all of his stocks last June and then beat up the stock market during the campaign. Assuming he sold his stocks at roughly Dow 17,700, he is now touting the stock market at Dow 20,600. The contrarian in me says to be a little worried. Couple that with our sentiment model which was coupled with our market model and you have the ingredients for some weakness.
I absolutely do not believe the bull market is over.
That will stop the usual emails. I am somewhat concerned about the next 4-7% move. It may be time to play some defense and take some very nice profits.
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