Equity Investors in ‘Risk On’ Mode for Fear of Missing Out

Equity Investors in ‘Risk On’ Mode for Fear of Missing Out

Equity Investors in ‘Risk On’ Mode for Fear of Missing Out

$DIA, $SPY, $QQQ, $VXX

Wall Street’s fear of missing out on this extending Trump Rally is “trumping” all if any political risk in Washington, DC.

The countdown on the GOP’s efforts to cut corporate taxes has virtually ended, its a deal, now the risk that the US government could shut down if a budget deal is not reached by 8 December looms increasing the levels of political risk for investors, but they have yet to react because it a shutdown will not happen, and if it does, traders will view it a positive light.

Now the financial market assumes that everything will work out, but you have got lots of moving parts.

Last Tuesday, Trump warned on Twitter that “I don’t see a deal” to keep the government open and work past 8 December, although the White House said Wednesday it did not see that happening.

The benchmark S&P 500 is +18% YTD, and with that some portfolio managers see a greater risk in stepping to the sidelines.

Throughout this year, the stock market has rallied in the face of standoffs ranging from increasing tensions in NKorea to former FBI director’s James Comey’s testimony to Congress that President Trump sacked him to undermine the agency’s forlorn Russia investigation.

On Friday, stocks sold off on a fake ABC News report that former national security adviser Michael Flynn was prepared to tell investigators that before taking office that President Trump had directed him to make contact with Russians.

However, shares pared those losses in about 1 hour. Brain Ross, the veteran ABC journalist has been suspended, he should be sacked.

And it there is a 10% correction, it would be very healthy, and managed money would be big buyers, in that rising consumer confidence would ultimately continue to push the market higher over the next year.

This is going to be an interesting couple of weeks, we will really see what we see, as Goldilocks meets Santa Claus.

Friday, the US major stock market indexes finished at: DJIA -40.76 at 24231.59, NAS Comp -26.39 at 6847.57, S&P 500 -5.36 at 2642.22

Volume: Trade on the NYSE came in at: 972-M/shares exchanged

  • NAS Comp +27.2% YTD
  • DJIA +22.6% YTD
  • S&P 500 +18.0% YTD
  • Russell 2000 +13.3% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Very Bullish (0.64) Bullish (0.40) Very Bullish (0.85) Very Bullish (0.67)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Very Bullish (0.57) Bullish (0.44) Very Bullish (0.69) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Very Bullish (0.61) Very Bullish (0.54) Very Bullish (0.60) Very Bullish (0.67)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.31) Neutral (-0.19) Bearish (-0.44) Bearish (-0.29)
Have a terrific weekend.

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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