The Dow Jones Industrials Index (DJI; DJIA; INDU), the Dirty Thirty, the most-watched stock market index by the American public, prints a new all-time record high at 28090.21 on Tuesday, 11/19/19. The Dow's all-time closing high is 28036.22 on Monday, 11/18/19. Sound the Seven Trumpets! The American stock market is the S&P 500 and the SPX also prints a new all-time high at 3127.64 on Tuesday, 11/19/19. The SPX all-time closing high is 3122.03 on Monday 11/18/19.
Today is the big day. The Impeachment Hearings against President Trump continue in the House of Representatives in the US Congress. The drama is somewhat status-quo. The corrupt Democrat Tribe is tilting the scales every way possible to paint King Donny in a negative light and push the guy from office either before or in the November 2020 election now only 50 weeks away. The corrupt Republican Tribe continues to prohibit witnesses from testifying while at the same time proclaim transparent cooperation; they say there is nothing to see here except for the halo above Teflon Don's head.
Well, today, the rubber meets the road. One of the filthy corrupt tribes will win today and the other will lose and it will impact the stock market direction forward. Ambassador Gordon Sondland is testifying at the impeachment hearings and he has first-hand knowledge concerning the events in Ukraine. The president is accused of holding back military aid to Ukraine until the newly installed President Zelensky would announce in public that an investigation into Joe and Hunter Biden, and energy company Burisma Holdings, has started. Democrat Joe Biden is perceived as republican Trump's major foe in the upcoming presidential election (although his status is diminished during the scandal). Thus, King Donny was trying to get dirt on the Biden's and cause mischief in their campaign so his path to re-election was easier.
The democrats are just as filthy. Hunter Biden, who has no expertise in the energy arena, was placed on the Burisma board lining his pockets with hundreds of thousands of dollars. It helps that daddy has political clout and influence and was vice president at the time. It's easy to see why America's crony capitalism system is failing and is singing its final swan song during the coming months and few years.
The funniest aspect of all the impeachment drama is how it exposes the filthy rampant corruption among all politicians especially those within the beltway (Washington, DC). The final result of all the theatrics may damage both men. Biden may be viewed as corrupt with his son on the Ukraine energy board and his poll numbers are slip-sliding away. Trump may be viewed as corrupt as he uses taxpayer money to further his political and future monetary ambitions. This must be how crony capitalism finally implodes and ends. Capitalism fails because of human corruption and non-transparency just like all other ism's. It's not rocket science.
The plot thickens. Sondland donated millions to Donny's campaign and in return was awarded an ambassadorship to Ukraine (this is how the crony capitalism system works). Sondland likely regrets ever desiring such a position since his testimony, today, in only a few short hours from now, may determine the fate of the POTUS. It is amazing. Sondland will either sing a song like a canary spilling the beans on Teflon Don sealing the president's negative fate ahead for impeachment and the election, or, he may stick with Team Trump and perform Donny's dirty work defending the president. Sondland may support the president since if he gets into trouble over perjury or some other legal entanglement, and he goes to jail, he probably expects the president will pardon him.
The stock market idled sideways this week awaiting the outcome of the Sondland testimony which is imminent. If the Sondland testimony goes the way of the Democrat Tribe, Donny is toast. Republicans will begin jumping ship and drifting over to the impeachment side which would be the death nails of Trump's presidency.
If the Sondland testimony is not all that damaging for the president, and Gordy finesses his way through the hearing, the Republican Tribe will be throwing confetti and singing songs of joy. If Trump weathers this serious political storm today, his approval ratings will leap higher and he will pave an easy road to re-election next year. It's all on the line today. High drama. It is interesting that Sondland's testimony today will likely determine if Trump attains a second term, or not. Markets are watching and waiting.
S&P futures are down -11 and Dow futures are off -105 about 3-1/2 hours before the opening bell at 9:30 AM EST and less than 3 hours before the Sondland testimony. VIX 13.52. Gordy is set to testify at 9 AM EST before the House. The democrats want this story to be front and center all day long. This means that futures markets may be moving before the opening bell for the regular session. The tension and excitement mounts. Today may become messy.
The RSI and stochastics are overbot agreeable to a pullback. The red rising wedge patterns are ominous since the collapses from rising wedges can be quite dramatic. The red Ines for the chart indicators show all in negative divergence as price made the new high, thus, a spankdown is on tap. Remember, the uber low CPC and CPCE put/call ratios over the last couple weeks verify rampant complacency in the stock market and a significant top at hand.
The Aroon green line is at its max one hundo and nowhere to go but down which is bearish while the red line is at 28 coming up and out of oversold territory which is also bearish for the Dow. Watch the Aroon to see if the negative cross occurs which would forecast gloom ahead.
Price has violated the upper band so the middle band at 27463 is in play as well as the lower band at 26694. The Dow is extended above its moving averages requiring a mean reversion lower.
The brown circles show distribution taking place 10 times in the last couple months. That's the smart money handing off shares to the dumb money fools. Willie, that is popular with the ladies around the office, is bragging at the water cooler that he just bot AAPL and AMZN stock with his last paycheck. He cites all the record highs in stocks and tells everyone to buy equities right away or you will miss the train leaving the station.The smart money counts on the hype in the markets to allow time to distribute shares to Joe Fool, Jim Retail, Frank Sixpack, Bertha Bagholder and Sally Sucka.
Yesterday's candlestick is an outside reversal. Price made a higher high during the session but then closed at a lower low than the day before. This pattern points to negativity ahead. What typically happens is that price will sneak out a few more highs for a few days or week or two but on the weekly basis will begin a trend of downside going forward.
Stock market history may be written today. It all depends if Sondland sings like a songbird, or not. Of course any positive, or negative, trade news and/or central banker announcements will continue sending stocks to and fro. The Senate passes a bill supporting the Hong Kong protests which is causing dismay with the Beijing communist leadership and jeopardizes the US-China trade deal. The US House and president will need to approve the resolution in the days ahead. Okay, Gordy, it is all yours today. It is time for your 15 minutes of Andy Warhol fame; take it away. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 6:45 AM EST: S&P -13. Dow -115. Nasdaq -44. Russell -11. VIX 13.62. Oil +0.4%. Copper +0.3%. Gold 1477. Silver 17.28.
Note Added 7:11 AM EST: S&P -7. Dow -74. Nasdaq -26. Russell -7. VIX 13.37. Oil +0.7%. Copper +0.2%. Gold 1473. Silver 17.21. DAX (Germany) -0.7%. US Yields are; 2-year 1.58%, 5-year 1.59%, 10-year 1.75%, 30-year 2.22%. The 2-10 spread is 16.4 bips.
Note Added 8:14 AM EST: S&P -9. Dow -87. Nazzy -30. Russell -7. VIX 13.42. Oil +0.6%. Copper slips negative over the last half hour down -0.1%. DAX -0.7%. US Yields are; 2-year 1.57%, 5-year 1.58%, 10-year 1.74%, 30-year 2.21%. The 2-10 spread is 16.8 bips. The Housing Starts yesterday missed forecasts by a smidgeon but the number was healthy overall. The housing recession remains on the table. Weekly mortgage applications this morning are disappointing.
Note Added 8:53 AM EST: Hello. Sondland prepares for his testimony and written text says he worked with Giuliani (Trump's lawyer) in Ukraine on orders from President Trump. S&P -10. Dow -85. Nazzy -33. Russell -7. VIX 13.15. The bulls are trying to jam volatility lower to offset any negativity from the Sondland comments. Oil +0.6%. Copper -0.3%. DAX -0.666%. 10-year yield 1.74%. The Housing Starts yesterday missed forecasts by a smidgeon but the number was healthy overall. The housing recession remains on the table. Weekly mortgage applications this morning are disappointing.
Note Added 9:44 AM EST: The trading day is underway and Sondland is making his opening statement before the House Intelligence Committee at the Impeachment Hearings. Sondland's comments thus far appear damaging to the president but the stock market is taking it in stride. The democrats and republicans may keep looking at the impeachment Rorschach image and see different things. The SPX is down 5 points, -0.2%, to 3115. LOD 3113.63. The Dow is down 64 points, -0.2%, to 27870. LOD 27860. The drama continues. Sondland continues singing his song. Copper -0.1%.
Note Added 11:05 AM EST: The Sondland testimony is damaging to the president. The proceedings take a 5-minute break and now the republicans will question the ambassador. Comically, the market does not care. The SPX is down a couple points at 3116. The Dow is off only 60 points at 27874.
Note Added 11:09 AM EST: Democrat Adam Schiff, who is conducting the impeachment show, runs to a microphone during the break time and emphasizes that Ambassador Sondland says the president is tangled up in a quid pro quo and all the top people were in on the nefarious game including Trump, Pence, Pompeo and others. The stock market still does not care. SPX 3116. Dow 27860. Nasdaq 8568. The Russell 2000 small caps are positive up 4 points, +0.2%, to 1602 maintaining the psychological 1.6K level. VIX 12.73. Copper -0.1%. King Donny is at the Whitehouse watching the Impeachment Hearings on television and laughing his orange head off. Like the bloviating showman said three years ago, his base and supporters love him so much that he could walk out onto 5th Avenue in New York City and shoot someone and no one would care. It looks like the market does not care about the Sondland testimony although perhaps global investors and traders, and the computers, are waiting to hear the republican line of questions to begin now.
Note Added 12:14 PM EST: The Sondland testimony continues. Markets continue yawning. The republican time ends and now the democrats are asking Sondland more questions. The stock market does not care about the impeachment proceedings, perhaps until it does. SPX 3114. VIX 12.84. Copper -0.2%. 10-year yield 1.76%. Gold 1468. Silver 17.06.
Note Added 1:23 PM EST: The stock market is falling apart on news that the US-China trade deal hits a snag. The SPX is down 26 points, -0.8%, to 3094. The Dow collapses 240 points, -0.9%, to 27694. COMPQ -1.0%. NDX -1.2%. RUT -0.8%. The VIX is 13.97 and was above 14 minutes ago. Copper -0.4%.
Note Added 3:38 PM EST: There is about 20 minutes remaining in the trading day with the SPX down 17 points, -0.5%, to 3103. LOD 3091. 20-day MA 3075. The Dow loses 148 points, -0.5%, to 27786. VIX 13.17. Copper -0.4%.
Note Added Thursday Morning, 11/21/19, at 5:15 AM EST: The SPX finishes hump day down 12 points, -0.4%, to 3108. The Dow loses 112 points, -0.4%, to 27821. The bulls fight back during the day yesterday since copper and commodities are holding in the bull camp as well as volatility. The Sondland testimony is damaging to President Trump but markets do not care. The Rorschach impeachment test continues with the democrats and republicans seeing things along party lines. Markets did react negatively to the news that the trade deal hits a snag. Overnight, however, the communist head negotiator Liu says he is "cautiously optimistic" so that brought S&P futures back from about -14 to -8 overnight. Copper -0.9%. As this message is typed, China's Liu now invites the US negotiating team to China for more talks. The bulls celebrate the trade deal hype like Pavlov's dog celebrates a biscuit and begin tripping over each other buying the long side. S&P futures are up +3. Dow futures +25. Nazzy +6. Russell +3. VIX 13.03. Teflon Don has appeared to weather the Sondland and impeachment storm, for now. Most Americans are likely resigned to the fact that all the politicians are corrupt. Copper -0.8%. Interesting. Copper does not yet recover like the futures do on the happy trade deal talk.
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