Scarecrows Aroused

Here we go.  The scarecrows are in motion today.  Nothing like a good gap down on political "news" to stoke the fear in the Trump trade.  There was a counterintuitive bounce at the close after the healthcare bill was pulled because the simpletons thought it would mean a faster track to tax cuts.  But then the media went to town on the implications for Trump's tax policies and it was deemed to be a negative, making it harder to get tax reform.  Don't buy it.  It just makes the Republicans more determined to get tax cuts.  They HAVE to get something done, or they will look totally incompetent.  Even if it means selling their soul to the Freedom Caucus to do it.

As I write, the market is already making a move higher off this reflexive gap down, as it was an overreaction.  There was already a lot of put activity last week based on healthcare bill worries, now that bridge is passed, you should see an oversold bounce.  All the scarecrows are out in force declaring the death of the Trump trade.  Even though I believe it is a bunch of hype, the Trump trade is not over.  As long as tax reform is ahead, and not in the rear view mirror, the bulls will have hope, and the stock market thrives on hope.

I would be a buyer intraday today, looking for a move higher into Wednesday.  Then we should get another test lower after the oversold bounce peters out.  SPX 2320 is a buy area, and SPX 2350-2355 is a sell area, for the week.