Editorial Comment
After the latest TACO sale, the stock market is doing the predictable. Trump did what we all should have known he would do; flip on his vile and bombastic statements made yesterday and on Easter, of all days. He thinks he is negotiating, but he’s making a fool of himself and disgracing all Americans as well. He’s made for reality TV. I hate reality TV. It’s cheap, cheesy and just plain a waste of time.
Thank God we still have adults in the room, which I was confident would take the form of the military leadership that Trump’s cartoon-like side man at the DoW has not yet fired. They were never going to turn Trump’s rhetoric into any sort of reality.
Analytical Comment
ES (SPX futures) is on plan, near the highest allowed point ‘B’, if this is an A-B-C correction. Again, it’s theoretical. With this expression of relief that Trump did not go full frontal genocidal maniac (he only plays one on TV), ES has risen to the converged moving averages and clear lateral resistance. So if it’s an A-B-C, this should be about as good as it gets.
The existing plan favors that and a decline to ‘C’ in order to start considering a bullish H2, 2026. The significantly less favored alternative is that happy days are here again and the stock market keeps going up as ‘all is right with the world!’ (or at least oil stops going up). Oil is, by the way, getting smashed hard in pre-market.
If it’s an A-B-C, this would obviously be a shorting opportunity for speculators or a selling opportunity for normal people (in wait for a big rally later). A ‘sell the news’ type situation.
But Huey, Dooey and Louie (3 Amigos, Trump/Bessent/Warsh, what have you) stand ready to inflate the system into the mid-terms (in my opinion). The logical thought is that this would come during a market decline and economic easing. But with these guys, I would not be surprised if they kick it into gear at any time. Warsh does not take the Fed until May, but to my eye Bessent is a bit of a snake. All options on the table.
Bottom Line
- Favored option remains A-B-C (sell the news) to a ‘C’ low prior to a bullish 2026.
- Less favored option remains stock market bull resumes now.
We should know soon which is correct.
