NFTRH; The Straw and the Camel’s Back

A quick note as Trump impeachment noise makes the headlines this morning…

The elephant in the room is a market propped up, post-election, on Trump mania and its coming fiscal policies, and the straw that would break the camel’s back (and finally trigger impeachment proceedings) may or may not be the firing of FBI director Comey. I don’t have much doubt that this president will not see the end of his 4 year term, but will it be the outrageous Comey firing that starts the ball rolling? I for one, cannot answer that question.

We often talk about inflammatory events needing to be processed as just that, inflammatory, but also usually not lasting in their effects. So this morning’s market reaction could be just one of those knee-jerks.

But then the issues of over valuation and wavering confidence, the latter of which this entire post-November rally has been built on, come into play. Another factor is the seasonal, as May through July often see volatility increase.

Yet another consideration is that if the market begins to correct its valuation and overbought issues, and assuming Trump is impeached, that will not be a bad thing (fundamentally for the markets, at least) in my opinion. Who would succeed Trump? What’s his name, the vice president. Oh yes, Pence. A conservative republican. The rest of the machinery will likely remain on the current agendas without the buffoonery if its head gets cut off.

I am not planning to be actively bearish the market until/unless I see certain support parameters break and trends start to turn. Rather, I’d like to balance things with precious metals positions, both physical metal and gold stocks (that may be traded at will until I get confirmed macro signals). There is enough gold/gold stocks and cash on hand to balance out (theoretically, at least) what is going on in the markets.

My goal of balance and risk management through cash management has not changed. It will change when trends change, out beyond the news of the moment.