Record-High Wednesday, Again
Up and up we go.
The S&P 500 is up 12% since the end of June and that's nothing compared to the Nasdaq but the Nasdaq is just silly now and so are the other indexes. Sure money is pouring into the economy and the Dollar is collapsing but will making the rich SO MUCH RICHER really stop the virus that is ravaging our economy? Of course not.
In last week's Live Trading Webinar, we shorted the Dow Futures (/YM) at 28,000 (avg) and we're still in that trade a week later as the Dow hasn't done much in the past week – and Apple (AAPL) is in the Dow! We could be consolidating for a move up or a move down but, as noted in our earnings anlaysis of the Dow components on July 23rd, there's no justification for a move higher – not from an actual earnings perspective anyway.
Of course there are other factors in play. The Government has pumped $6.7Tn into the economy in the past 6 months and they are looking to pump in more. The US is reporting less virus cases – mostly because we are doing less testing but it does turn out that Trump was right – less testing leads to less cases so, as long as we don't test, the virus will be under control, right?
As ridiculous as that logic is, 40% of the people in this country are going to vote to re-elect Donald Trump – the LIKE his policies, they THINK he is doing a great job and they want 4 more years of this. Those people also invest in the market and they believe the economy is going great and the virus is like a cold and will quickly pass (of course now it's 6 months after Trump said the virus would disappear by April, but who can actually count anyomore?).
There is, indeed a sucker born every minute and then the grows up and buys TSLA stock for $1,900, which is a $360Bn valuation for a company with $25Bn in sales and no profits. Yes, it's sour grapes because we are short TSLA in the STP but I don't think this surge will last very long – up 30% in a week because the stock is splitting doesn't make a lot of sense and 60% of the population still seem like rational people – for now.
I say for now because we were just having a serious discussion last night about the possibility of a Civil War in this country if Trump refuses to leave office after being defeated or obviously rigs the election to stay in power. Multiply the Portland protests by 1,000 and think back on the Arab Spring, which spread from Tunisia to Libya, Egypt, Yemen, Syria and Bahrain, where either the ruler was deposed (Zine El Abidine Ben Ali, Muammar Gaddafi, Hosni Mubarak, and Ali Abdullah Saleh) or major uprisings and social violence occurred including riots, civil wars or insurgencies.
Sustained street demonstrations took place in Morocco, Iraq, Algeria, Iranian Khuzestan, Lebanon, Jordan, Kuwait, Oman,and Sudan. Minor protests in Djibouti, Mauritania, Palestine, Saudi Arabia, and the Moroccan-occupied Western Sahara. A major slogan of the demonstrators in the Arab world is ash-sha?b yur?d isq?? an-ni??m ("The people want to bring down the regime").
The wave of initial revolutions and protests faded by mid-2012, as many Arab Spring demonstrations met with violent responses from authorities, as well as from pro-government militias, counter-demonstrators and militaries. These attacks were answered with violence from protesters in some cases. Large-scale conflicts resulted: the Syrian Civil War; the rise of ISIL, insurgency in Iraq and the following civil war; the Egyptian Crisis, coup, and subsequent unrest and insurgency; the Libyan Civil War; and the Yemeni Crisis and following civil war. Regimes that lacked major oil wealth and hereditary succession arrangements were more likely to undergo regime change.
These brutal Dictators only perpetuated low standards of living for their people while living opulent lifestyles with the OCCASIONAL murder of some of the citizens – either journalists or opposition leaders. Trump is LOWERING the standard of living for the majority of our citizens and the deaths are relentless and random and now he is sending our children off to be infected to spread his virus far and wide – just so he can declare a state of emergency and postpone the elections.
Hopefully that does not happen but, if it does – what are you going to do about it? 40% of you will cheer and be happy that your guys is blowing up the system and staying in charge but about the same 40% of you will be mortified but what are you doing to make sure that doesn't happen? Are you getting out the vote? Are you encouraging people to register? Are you helping your candidate? Trump lost the popular vote by 3M and he's President now – it's not going to take a minor victory to unseat him.
And what if he doesn't leave?
Freedom's just another word for nothin' left to lose
Nothin', don't mean nothin' hon' if it ain't free – Joplin
At what point will Americans have nothin' left to lose? Sadly, if things continue the way they are going, we might find out.
I'd trade all my tomorrows for one single yesterday…