As economic benefits of last year's Tax Cuts and Jobs Act begin to filter into the US economy, the S&P 500 Index appears to be headed towards a retest of its all-time high of 2872.87 set in January of this year, as shown on the monthly chart below. This record high was accompanied by an all-time momentum (MOM) high, as well...hinting of further strength ahead at some point on this timeframe.
It has broken above what was near-term resistance of 2680 (as I described in my post of May 4).
Watch for a break and hold above its next major resistance level (top of long-term uptrending channel) at 2750. Otherwise, a break and hold below 2680 could see price retest its next support level of 2620, or lower.
However, political headwinds are lurking as Congresswoman Pelosi promises to roll back those tax cuts (like Pac-Man on steroids gobbling up "crumbs") if Democrats retake Congress in the November mid-term election...as well as Congresswoman Waters' non-stop demands for President Trump's impeachment.
Just how much such inflammatory rhetoric will affect the equity markets remains to be seen...perhaps not much until we get into the late Summer/early Fall with both parties further defining their policies and priorities that they wish to implement going into the mid-term and beyond into the 2020 general election...besides obstruction and impeachment.
* UPDATE May 17...
Democrats continue to put the well-being of MS-13 gang members (who have entered the country illegally) ahead of that of American citizens...
And, with comments like the one below, Democrats continue to push their gender card and now conflate it with the health of financial markets.
Exactly what their overall agenda is remains a mystery at this point...and whether or not that will be explained in detail before the mid-term election is anybody's guess.
* UPDATE May 22...
We'll see if Republicans can build on this shift in momentum in their favour over the Democrats through to the mid-term election. How will President Trump contribute to this momentum, not only to November 2018, but through to the general election in 2020, and beyond? We'll see...
* UPDATE May 25...
It's "interesting" and odd that Democrats, and their media cohorts, don't want full cooperation of the Intel agencies and transparency in order to uncover all the facts pertaining to the 2016 pre- and post-general election campaign activities of both the Democratic and Republican parties, as well as activities of foreign operatives/governments, DOJ, FBI, CIA, State Department, etc.
Only by exposing all the facts, can appropriate remedies be employed in the future to prevent further meddling by any foreign entities or governments in future elections...as well as arming Americans with such information and safeguards.
* UPDATE May 30...
To summarize what the U.S. political landscape looks like right now...I never thought I'd see the day when Democrats:
- put the interests of the terrorist group, Hamas, above Americans
- put the interests of North Korea above Americans
- put the interests of the violent MS-13 gang above Americans
- put the interests of Iran above Americans
- put the interests of illegal immigrants ahead of legal immigrants and Americans
- are against national security, border protection, and law and order
- want to tear down capitalism and free and fair trade practices
- have done everything in their power to obstruct the passage of laws that enhance the lives of Americans (e.g. they all voted against the 2017 Tax Cuts and Jobs Act)
- think that it's OK to spy on a political campaign in order to subvert the constitutional rights of a fair political election...which resulted in a duly elected President anyway, but whose constitutional rights to govern are in jeopardy inasmuch as the intelligence agency in charge of an investigation into his campaign is, itself, conflicted and seemingly biased and compromised.
They've created a political mess...I wonder what would happen if they regained power in the House and Senate in the mid-term election (besides impeaching President Trump without sufficient grounds and legal cause, as they've repeatedly threatened since he took office)? No doubt, that would create a constitutional crisis and lead to anarchy.
Is that what they really want? We'll see.
In the meantime, they (along with most of the liberal mainstream media, as well as former Obama Intel agency Directors Comey, Clapper and Brennan) seem to be doing President Putin's bidding in sowing chaos and extreme divisiveness in the U.S. with their non-stop and, as yet, unproven accusations of President Trump colluding with Russia during the 2016 election. We know that 90% of the coverage of Mr. Trump by the majority of the media is negative, regardless of the subject matter.
In any event, whatever happened to the presumption of innocence until proven guilty? That seems to have been thrown out the window with respect to this matter. If there was collusion, where's the proof and for how long will this so-called "legitimate investigation" drag on?
* UPDATE June 25...
Maxine Waters is at it again...even liberal-leaning CNN has condemned her latest calls to harass Trump officials in public...imagine what her Democratic party would do to Republican Americans if they retake Congress.
Representative Steve Scalise (R) and some of his collegues were shot and wounded a year ago by a man who hated Republicans. This has become a dangerous escalation of an assault against civil liberties and who knows where this will all end.
There are calls for House Speaker Paul Ryan to sanction Ms. Waters and for her actions to be referred to the Ethics Committee for review. In the meantime, she continues with her unabashed 'total resistance' tactics.