President Trump: "Woulda-Coulda-Shoulda" Legacy?

Woulda-Coulda-Shoulda...that's what President Trump's legacy will be when he leaves office IF he fails to, not only fulfill his duties to "serve and protect" the citizens of America, first and foremost, but also to be perceived to have so done.

CNBC's survey (conducted March 17-20) reports the following...

CNBC.com

Notwithstanding the many accomplishments that President Trump and the Republican party have made over the past 14 months, I'd say that this is not good news as the mid-terms elections approach in November, inasmuch as they don't seem to be reflected in these poll results.

Perception plays a big factor in influencing human behaviour, maybe more so than facts, at times. It appears that the American public has not placed as much emphasis on those accomplishments as the Trump administration and GOP have...translation: resting on their laurels (and simply tweeting about it) has been of no benefit...nor is that about to change without a precise, prescriptive "fix."

From my perspective, I'd say that President Trump, along with his Republican party, will need to place a higher priority on, and take immediate steps to, firstly, accurately identify the reasons for such lack of support and favourability (diagnose the ailment), secondly, prepare the appropriate strategy (medicine) for it, and, finally, swallow that pill and take the appropriate actions needed to regain the public's trust, first and foremost.

My own perception tells me that the President's strategy, when it has come to his words and tweets about President Putin, are not reflective of his duty to "serve and protect" the American people...rather, they give the impression that he is more concerned with Mr. Putin's view of him than the people he serves. If this is correct, then the "fix" is in his hands ...he cannot afford to be, nor perceived to be, actively "stupid in a friendship with President Putin" and remain in office, nor does he deserve to be. Americans
are astute and will not stand for that.

P.S. From the volatility and massive price swings that have plagued the U.S. equity market since the early part of this year, I'd say that markets had already priced in any positive economic benefits from those Republican/Trump accomplishments. As noted on the following weekly chart of the SPX, the scale of the average trading range (in histogram format and based on an input value of 1) has reached the weekly ranges that were last made during the 2008/09 financial crisis.

If this kind of volatility persists going into the midterm election, this will not bode well for Republicans and President Trump. In my Market Forecast for 2018 post I projected that we'd see an increase in volatility and political uncertainty for 2018. Since then, I've written several posts about a variety of "volatility gauges" that can be monitored over the coming weeks/months for clues on equity weakness/strength here, here, here and here.

Market volatility may be one indicator as to the favourability of whether or not Republicans will retain a majority in the House and Senate, and, ultimately, the White House...no doubt, there are many others...it's up to them to figure that out.

* UPDATE April 17...

President Trump, by continuing to contradict already-released statements by your State Department (this one is the latest example), you emphasize your inability to formulate and carry out a cohesive strategy, without constantly flip-flopping and undermining your representatives...not a good look for a President, or for the U.S. when it comes to foreign affairs.

* UPDATE May 4...

Another one of President Trump's team thrown under the bus...

"He'll get his facts straight." 

REALLY? 

A fact is definable, indisputable and remains unchanged...and, presumably Rudy's "facts" came from you, Mr. President, the source.

And, why you've got your lawyer speaking publicly about this (as well as yourself) is unseemly and foolish...as your backtracking today already proves. If you've hired lawyers to do their job, let them do so and concentrate on your own, which is to serve the American people, not yourself.

By the way, do your Press Secretary (as well as all the White House staff) a favour and insist that she (and they) refer ALL questions from reporters regarding any legal matters to your legal team and refrain from answering ANY of them. Sarah's being mercilessly dragged through the mud by the media for trying to do her job with the information she has at any given time...she doesn't need to be unnecessarily burdened with legal issues not in her purview. And it only adds to the media's never-ending narrative of chaos at the White House. Perhaps the issuance of a formal White House press release to emphasize that matter is in order.

Finally, loyalty and respect is a two-way street...your team can only support and properly represent you if you keep them in the loop. Keep them in the dark as you flip-flop on issues and you'll find yourself out of a job pretty quickly, at worst...or devoid of any staff, at best.







* 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...

Source: NationalReview.com

Twitter Caught in "Fibs"

Twitter (TWTR) is stuck in between two long-term Fibonacci retracement levels (after nearly tagging and retreating from the 40% Fib) and a downtrending channel, as shown on the following monthly chart.

Momentum had been building since mid-2017, but was capped in mid-February.

It is 29% lower than it was at the close of its first week of its IPO (November 7, 2013), and it has spent more time under water since then, as shown on the weekly chart below.

A drop and hold below 28.00 could see a further decline to 20.00, or lower. Alternatively, a break and hold above 40.00 would be needed to confirm a sustainable price rally.

Russian Index Breakout Failure

I last wrote about the Russian Index in my post of September 8, 2017.

Since then, it has broken above one downtrend line, popped above its major resistance level of 1200, spiked briefly above its next major downtrend line, only to fall back below, as shown on the following monthly chart.

Momentum is rising tepidly and is above the zero level.

If this index can remain above 1200, while maintaining momentum above zero, we may see a second (possibly successful) trend line breakout attempt. However, I'd like to see a higher swing high made above the December 2016 swing high on momentum to confirm any sustainable rally. Otherwise, a drop and hold below 1200 will likely see a retest of 1080, or lower.

MSCI World Index at Critical Support Level

I last wrote about the MSCI World Index in my post of February 10 as one of the volatility gauges to monitor for clues in equity direction. At that time, its price was 2050.90 and I mentioned that 2032.74 was a critical major support level to watch.

Since then, it has dropped further and closed just above that level on Friday, as shown on the following weekly chart.

I'd reiterate that a drop and hold below that level could send all world markets into a tailspin. The dramatic and swift plunge of the momentum indicator (which began in late January) is hinting of further weakness ahead on this timeframe, unless we see a swifter and convincing (sustainable) bounce soon. In the meantime, look for wild swings in this index, particularly this coming week, and beyond.

Also, as a follow-up to my post of March 10, I'd just include an update on the following three equity volatility daily ratio charts (SPX:VIX, NDX:VXN, and RUT/RVX).

Once again, all three ratios have fallen below their critical support levels of 200, 350, and 80, respectively, are back below both their 50 and 200-day moving averages, and are still trading under the bearish influence of a moving average Death Cross formation. Furthermore, a new "SELL" signal has formed on the RSI, MACD, and PMO indicators...hinting of further weakness ahead.

As is the case of the MSCI World Index, no doubt, we'll also see some wild swings made this coming week and beyond on these ratios. Volatility will remain elevated until:

• all three ratios, not only climb back above, but also hold above, what is once again, their major resistance levels,
• all three technical indicators reverse and new "BUY" signals are formed, and
• the bearish Death Cross is reversed to a bullish Golden Cross.

Finally, most of the Major U.S. Indices and Major Sectors are under water in terms of their losses made, year-to-date, as shown on the following graphs.

The large-scale selloff hit all of the Major Indices and Major Sectors this past week, as shown on the following one week graphs.

Watch for any meaningful rotation into any of these in the coming week(s)...otherwise, I think equities are in for a rough ride.

Chill Out! 👀

To all the media pundits who are constantly freaking out over President Trump's latest cabinet/staff replacements, remember, no matter who he nominates/hires, whether they bring "hawkish" or "dovish" views, each one comes with credentials and is hired on his/her merits...Mr. Trump still makes the final decisions on matters and it's their job to carry them out...no doubt you've noticed that.

Besides, as President, it's his prerogative, as has been the case with all past Presidents.

P.S. By the way, the (American and global) mainstream media's non-stop (feigned) hysterical outrage over everything he does and says has lost its shock value, is patently transparent, venomous, stale, politically-biased, and is boring. Journalism (simply reporting actual facts) is dead and has been replaced by opinions, gossip, innuendo, hypotheses, fabrication, conjecture, mud-slinging guttersnipe, hearsay, smut-promoting allegations, and fear-mongering rhetoric.

Of course, the President should be held accountable to the office and the people he/she serves, at all times, but, c'mon folks, keep it real!

I'm turned off and tuned out...and calmly search out the facts on my own, while enjoying the peacefulness of that process.

                                             ~~~~~

P.S. My further thoughts on President Trump can be read here.

Close of 2018 Q1 Draws Near on Accelerating Volatility

Each candle on the following charts of the Dow 30, S&P 500, Nasdaq Composite, and Russell 2000 Indices represents a period of one quarter of one year.

This year's Q1 candle is a high-wave spinning top, representing indecision. It will close next Friday.

After today's broad-based equity drop, the SPX:VIX ratio has extended its decline, closing well below the 150 Bull/Bear line-in-the-sand level, and is mired in the "major conflict zone," as shown on the monthly ratio chart below. Momentum is accelerating to the downside and is well below its zero level.

The following monthly chart of the CBOE VIX Volatility Index (VVIX) shows that momentum of VIX volatility closed on an all-time high last month, forecasting rising volatility of equity volatility and risk. Where it closes next Friday may provide a hint as to acceleration or deceleration of further equity decline in the month(s) ahead.

In this regard, the next chart of the VVIX shows that momentum is accelerating on a daily timeframe, is well above the zero level, and is making a series of higher swing highs and lows. Watch for that to continue next month in order to confirm the sustainability of any further increase in VIX volatility.

Finally, the following monthly charts of the Dow 30, S&P 500 & Nasdaq 100 E-mini Futures Indices plus the Russell 2000 Index show that price is hovering above a moving average "Alligator" formation. If price falls inside this formation, we'll see high volatility and wild swings remain, with, possibly a further correction in equities, until it breaks out and holds above this beast. Unless we see a very sharp snap-back soon in these indices (in the next week or two), I'd say that higher volatility will continue for awhile.

The Fate of Facebook's Momentum About-Face

The following monthly chart of FB shows that price has plunged to near-term support defined by its longer-term uptrend channel median and 23.6% Fibonacci retracement level (166.22).

The reversal from its all-time high made last month has been accompanied by accelerating (to the downside) Momentum (peaked in October 2017) and Rate-of-change (peaked in September 2017) technical indicators which, in fact, reversed well ahead of price.

Neither of these two indicators have broken below their respective zero levels since the early months following FB's IPO. A drop to, and hold below, zero on this monthly timeframe on these indicators could spell serious trouble for FB in the longer term. In this regard, watch for any drop in price to, and hold below, its next support level around 148.00 (channel bottom plus 40% Fib retracement level).

And, the fallout from their data-mining activities of their users' personal information begins...and escalates...

Daylight Saving Time Begins at 2:00 am Sunday March 11th

Daylight Saving Time begins on Sunday, March 11 at 2:00 am. Clocks go forward one hour.

9-Year U.S. Bull Market Run: Will We See a 10th?

Each candle on the following five charts of the Major U.S. Indices represents a period of one year.

You can see at a glance that we're still ensconced in a bull market that began in 2009 when the Fed first began their QE monetary policy. 

In fact, both Tech indices closed at new all-time highs on Friday and haven't experienced much of a pullback, so far, this year, compared with the other three relative to last year's candle (thanks, in large part, to the FAANGs, as shown on the daily chartgrid below)...indicating that the bulls are still in charge of equities, overall.

However, they have been battling increased volatility, as depicted on the following three monthly equity/volatility ratio charts (SPX:VIX, NDX:VXN and RUT:RVX).

In my post of February 26, I had re-iterated the importance of, what once were and had been breached, major support levels for these ratios, namely:

• SPX:VIX Ratio -- 200
• NDX:VXN Ratio -- 350
• RUT:RVX Ratio -- 80

The one ratio that is still below that level is the SPX:VIX ratio, but it's poised to break above. Keep an eye on the Momentum indicator for a break and hold above the zero level on this timeframe as confirmation of a resumption of bullish bias in the SPX, if it crosses above 200.

While Momentum on the RUT:RVX ratio is above zero, it's not on the NDX:VXN ratio. It will need to cross and hold above to confirm sustainability of buying in the NDX.

On a daily timeframe, you'll note that all three ratios are still trading under the bearish influence of a moving average Death Cross formation.

The SPX:VIX ratio is retesting the 50-day moving average and remains the weaker of the three ratios, while the NDX:VXN and RUT:RVX ratios closed just above their 200-day moving average on Friday. The RSI, MACD and PMO technical indicators are in positive territory on all three ratios, so look for that to continue to confirm a bullish bias in the SPX, NDX and RUT, in the short term. Ultimately, the Death Cross will need to reverse to a Golden Cross as a bullish confirmation, in the longer term.

In conclusion, keep an eye on price action of the monthly and daily ratios (relative to their respective major support levels, moving average formations, and technical indicators), to gauge the strength and direction of the SPX, NDX, RUT, and equities, in general. If we see those gauges turn and/or remain positive, we'll likely see a 10th year produced in this 9-year bull market run. As well, additional influencers of equity volatility can be found in the "Volatility Gauges" that I described in my post of February 10.

6,000 Is In BITCOIN's Crosshairs

I've a feeling that the hammer low of 6,000 will be retested on BITCOIN, as shown on the weekly chart below. From price action on this timeframe, it appears that measured selling has been occurring ever since it nearly reached 20,000.

Also, 6,000 is the approximate median level of a downtrending channel on the daily timeframe. Price has fallen back into this channel after a failed breakout.

What is does after such a retest should be "interesting."

More Volatility Ahead for Italy's FTSE MIB Index

Italy's FTSE MIB Index still remains more than 60% below its record high reached pre-2007 financial crisis, as shown on the monthly chart below.

It's facing major overhead resistance with the convergence of a triple top price formation, 40% Fibonacci retracement level, and the lower edge of its original uptrending channel around 24,568, which is still a long way above its current price, but which may act as a depressant and contribute to volatile swings until it eventually retests that level and either breaks and holds above, or is rejected.

Also, 24,568 is approximately the median (major resistance) of an Andrew's Pitchfork formation on the monthly timeframe, as shown on the chart below.

Near-term minor resistance and support sit at 22850 and 21500, respectively, as shown on the daily chart below.

With no clear majority victory for any political party in Italy's recent general election, I'd say that volatile swings that began in March of last year will continue in this index until price breaks and holds above or below this 1,350-point consolidation zone, in the short term.

Canada's TSX: Isolated

The monthly chart below of Canada's TSX Composite Index (TSX) shows that price has become isolated outside of several long-term intersecting trendlines and is caught up within an expanding triangle formation that began forming in December 2016 (right after the U.S. Presidential election).

Expanding triangle formations typically represent trendless, volatile periods of consolidation and this type of range trading will continue until price either breaks and holds above or below this triangle. I've no reason to doubt that this will be the case here...particularly, in view of the following.

Canadian Prime Minister Trudeau's recently-released 2018 budget is, in my opinion, a weak political budget, not a strong economic budget. There does not appear to be any kind of "backstop" fiscal measure/proposal to prevent or minimize economic headwinds/shocks that may arise from global or domestic pressures/issues, as well as current influences such as a wildly fluctuating Canadian dollar, wildly fluctuating commodity prices, rising global and domestic inflation, tightening Central Bank monetary policies, rising interest rates, high personal debt, anaemic wage growth, a weakening Canadian GDP (2017 Q4 GDP was 1.7%, below 2% estimates, and 2018 Q1 is not anticipated to be strong), etc.

Further headwinds are the current NAFTA negotiations that have been underway with the U.S. for some time now. After seven trade meetings, it's still unresolved and is in danger of being scrapped by President Trump. As well, Canada will be slapped with additional 25% steel and 10% aluminum tariffs, as has been proposed by him this week.

To enact such a weak budget during such volatile and chaotic times and think you can rely solely on monetary policy to protect in times of further stress, is willfully irresponsible and naive, especially when you're attempting to negotiate with your largest trading partner who is bent on implementing a protectionist (and very unpredictable) agenda to the detriment of other countries, including your own. You will, no doubt, be seen as a weak leader who is reactionary, as opposed to one who is perceived to be strong, proactive and prepared.

This budget panders to the political interests of a variety of special interest groups in preparation for the Canadian federal election (October 21, 2019) and recklessly ignores the above economic pressures/stresses...not a good signal for Canadians, such as myself, to consider at the voting booth. As such, we may see the TSX continue to trade within this expanding triangle formation until the election.

HOG-Tied

Harley-Davidson Inc. (HOG) may become a casualty of President Trump's "trade war" policies. In particular, his latest threat to impose a 25% tariff on steel imports and 10% on aluminum has produced a retaliatory threat against the U.S. by Europe on companies such as HOG.

No doubt, this new policy, if pursued by the U.S., would be argued before the WTO and have greater implications on other countries and goods/services. My post of November 12, 2016 made mention of the need for the new Trump administration and Congress to consider a number of factors so as not to, potentially, cause economic imbalances and a catastrophic domino effect on the rest of the world. This is a complicated issue and will bring forth many positions/arguments/considerations and may cause further instability in world equity, currency, financial, bond, and commodity markets until a resolution is reached.

Source: ZeroHedge

In the meantime, HOG has broken below the intersection of the lower edge of a long-term uptrending channel and the middle of a shorter-term downtrending channel, as shown on the following monthly chart. This apex sits around the 44.40 level.

Major Fibonacci retracement support sits at 41.93 (50%), while major resistance is 49.94 (60%). Until price breaks above or below this range, we'll likely continue to see trendless, chaotic trading as this already-fragile U.S. company is tied up and used as a pawn in international trade disputes.