Back on October 17th I began openly pointing out what I deemed “warning signs” that were signaling trouble (and by trouble I meant “big trouble”) may be on the horizon for the “markets.” In those observations I used a few charts, patterns, and commentary to describe that if my inkling was correct, than we could/should expect to see certain signals confirming it.
It was only a day later the first made its presence known. Since that point the “market” (once again) seemed to shrug off that signal and propelled higher over the resulting weeks. But a funny thing has happened, more than once, over these ensuing weeks that seems to have added weight to the original “signal”, rather than its usual dismal for relevance. To wit:
The above chart is of the S&P™ as of today at approximately 11:30AM ET using 4hr intervals. What the above chart represents is that since I first made that initial observation, where the first signal occurred (e.g., the first arrow) the “market” has revisited this precise area now three times.
There’s a lot to infer from the above, but too my eye, along with what is currently taking place in regards to the competing tax bills making their way through both chambers, the repercussions for any misgivings similar to what happened with the healthcare debacle are multiplied exponentially. The reason?
The proposed tax bill, and its ultimate passage, is that single “hair” that is holding the “Sword of Damocles” aloft.
Yet, there’s a catch, for it is not truly all about just “passing it.” At least, not as far as the “market” and business leaders are concerned that is.
Passing it is the secondary attribute. What’s in, or not in it, is what’s important. And the more the talking heads on Capital Hill keep talking – the more it sounds like there’s a lot of things not in there that should be, and even more that shouldn’t – that are.
This has the potential, in my opinion, for a very knee-jerk reaction, with very detrimental consequences, should what’s both in, as well as what’s not becomes known. Here’s what I said about this about a week ago, again, to wit:
From the article: “The Possible Trifecta That Demands Attention”
Then there’s the third, and it is here where everything can go awry: The release of what is, and what is not, in the so-called “Tax Cutting Bill.”
If, and I don’t say this lightly, if the proposed cuts are seen, or show, they’re nothing more than specious talking points? This entire rally since the November election lows is at risk. And by “risk” I mean of falling apart in ways similar to falling off a cliff.
With the healthcare fiasco still fresh in many a mind. If the supposed “tax cutting” resembles anything of the sort as was unveiled during the healthcare debate? All I can say is: look out for what “it’s different this time” can mean in reverse.
Just a reminder of where we are today, as to where we were last November when all of this was supposedly, “A done deal!”
We shall see.
© 2017 Mark St.Cyr