DOWN GOES FRAZIER, MARKETS GET RIPPED
For months, we have written and talked about the markets desire to sell off. On the Bubba Show I have talked about previous market bubbles and the ignorance of economist’s inability to recognize a bubble until years later. The biggest point was always the markets want to go down and all they need is a reason, that reason would not be economic data. The data would be obscure but information that would create fear and volatility
All the bad economic data over the years has not affected that rally and did not scare investors. Syria, ISIS, and North Korea bombing did not stop these markets. While the bubble continued to grow day after day, week after week and year after year, Lousy jobs the market goes up, no growth the market goes higher. Nothing mattered markets were being driven by the fluff of the FED and their stupid monetary policies. Free money for the rich and let the rest eat cake.
On Tuesday afternoon out came some news from the White House about Comey and President Trump which initially sent the markets lower in the aftermarket, by morning it looked like just another piece of bad news but the dip buyers came in and tried to buy, this time they got clobbered. The markets had their worst down day in months and the VIX exploded indicating some major fear for the first time in quite a while.
You never know what will cause a market to sell off but the first thing you must realize is that the markets want to go lower. Complacency was at 11 year lows, the pundits where cheerleading the markets higher and the touts were once again making their case that this time was different. We know from history it’s never different and history always repeats itself. This sell off should not have been a surprise, it was expected the only question was when.
Why was the obscure data out of Washington the trigger? It wasn’t about Comey and Trump, it was about the uncertainty and the trigger point for a market selloff. The big issue is what we have written since Trump was elected, tax cuts and healthcare are not going to be done so quickly. The crooks in the swamp are interested in themselves not about you and me. The Trump rally is old and the promises will not be kept because of the backstabbing in Washington.
The market top is probably in and the markets will switch from buy the dip to sell the rally. This action is all healthy for the markets, but could be painful for those that are overleveraged which will help accelerate the selling. Give President Trump credit for his hard work and ideas, but until you drain the swamp we are going to be in the same crap environment we have been in for the last 9 years
Keep those stops tight
Todd “Bubba” Horwitz