Trump on Tuesday Night

The big event this week is Trump's address to Congress on Tuesday Night.  He is supposedly going to outline the budget and his tax plans, among other things.  This looks to be a buy the rumor, sell the fact scenario coming up.  Normally, the selling would not be much on something like this but the market has rallied so much that any bit of disappointment would be enough to get weak hands to sell.  I don't expect much selling, just enough to get us back down towards SPX 2340-2350.

It is hard to say exactly what kind of address it will be, but if Trump's previous announcements are a guide, it will be vague, lacking specifics, and probably disappointing.

On Friday, I thought we would finally get a volatile day and finish weak, instead the market made its lows in the premarket, and rallied straight from the open and closed near highs.  Europe is trying its hardest to bring the US down with it, but it just doesn't have the firepower.  Investors have learned to shrug off European weakness at the US open and treat these gap downs like a buying opportunity.

Bonds rallied huge on Friday despite the equities trading mostly flat.  I would not get sucked into believing that the bond market is going to continue to be strong, there are a lot of events over the next 2-3 weeks, so I doubt the bonds will rally higher into them.  In fact, I think bonds are probably a better sell than a buy here.  Equities should be a sell either today or tomorrow, still deciding on that.