Thank goodness I don't work in the White House press corps any more, for the week's events would have sent me turning in circles like a whirling dervish.
First, Secretary of State Rex Tillerson was fired by tweet. Then threats were made of an additional $60 billion in special tariffs on Chinese imports.
A Democrat overcame a massive 20-point deficit to win in Pennsylvania by election right in the heart of Trump country.
Next, a TV talk show host was named the president's Chief Economic Advisor, replacing the former head of Goldman Sachs. That makes so much sense coming from a reality show presidency.
We learned the president's company was subpoenaed for a criminal investigation followed by more hints that the chief investigator may be about to be fired. A torture expert was appointed head of the CIA.
Then the No. 2 man at the FBI was fired the day before he was to retire.
Oh, I almost forgot. The most important technology takeover of this generation, Broadcom's (AVGO) bid for QUALCOM (QCOM), was stopped in its tracks by the administration.
Fortunately, I now live in another world, where sales, earnings, EPS and dividends are the things that matter, and all of those things are still good, if not great.
In fact, the market did not care a whit about the goings on east of the Potomac. At worst, we were down 389 points on the week, hardly a mosquito bite.
Here's the problem with this logic: If the chaos in Washington is not bad enough to cause a stock market crash now, it WILL become that bad eventually.
We are all passengers on a runaway train and the engineer has gone insane. It is not a matter of IF the train will crash, but WHEN.
Of course, the trampoline for the market was the most perfect Nonfarm Payroll Report in a decade, published on March 9. A market can tolerate a lot of abuse with 313,000 monthly job gains and a YOY Consumer Price Index (CPI) of 2.2%.
This means that inflation is essentially at zero. That's what got us the latest bond rally in which to sell.
If there is a dark cloud behind the silver lining it was the February Retail Sales of -0.1%, the third consecutive down month.
The massive tax cuts were supposed to send us pouring into the stores to spend as if we were storming the Bastille. So far, it isn't. If that doesn't start soon it could become a big problem for the market, and for your retirement funds.
I shall reiterate a conversation I had with a concierge client this morning. At this point in the economic cycle you want to be as aggressive as hell with your trading account. But keep in mind that your last trade will be a total loss.
Black swans can alight at any time, as can a total Washington blowup.
Those who are negative on the market, especially technology stocks, have totally missed the recent bull move and are therefore embarrassed, confused and bitter. They are talking their own book.
If you can tolerate this kind of risk/reward, then go for it. If you can't, better to execute my "Long Cruise" strategy. There will be fabulous short selling opportunities in 2019.
It was a good week for the Mad Hedge Trade Alert Service. Our double long in Apple (AAPL) raced up to a new all-time high.
Our remaining March options in Facebook (FB), both long and short, and our short in the Euro (FXE) all expired at our maximum potential profit points on the Friday options quadruple witching.
I also managed to take advantage of a rare rally in the US Treasury market (TLT) that took the yield down to 2.80% to jump back in on the short side.
You would think that selling bonds right before another Fed interest rate high was a good idea, but I was one of the few who actually executed this trade.
These happy and well foreseen developments took our March performance up to a robust 5.02%, our 2018 number to 10.65%, and our eight-year number to 288.12%. We are a scant 30 basis points below another new all-time high.
Yes, I know I make this look like a walk in the park. The truth is that this is the hardest 10.65% I have ever earned.
This coming week will see only one event of note, on Wednesday, when the Fed raises interest rates by 25 basis points. The Q1 earnings cycle doesn't start for another month. That should bring us the next leg up in the bull market.
On Monday, March 19, nothing of note takes place. Hit the "snooze" button on the alarm.
On Tuesday, March 20, the Federal Open Market Committee (FOMC) meeting begins.
On Wednesday, March 21, at 2 p.m. EST, the FOMC will most likely raise interest rates by 25 basis points to a 1.50%-1.75% range.
Thursday, March 22, leads with the Weekly Jobless Claims at 8:30 a.m. EST, which hit a new 49-year low last week at an amazing 210,000. Leading Economic Indicators follow at 10 a.m. EST.
On Friday, March 23, at 8:30 a.m. EST we get February Durable Goods Orders. February New Home Sales follow at 10 a.m.
At 1 p.m. we receive the Baker-Hughes Rig Count, which saw a small rise of three last week.
As for me, I will be working with my electrician to rewire my home to accommodate a doubling of my solar array to accommodate my new all-electric heating system.
The hoops I had to jump through with my local utility, Pacific Gas and Electric (PCG) were unbelievable, and will be the subject of a future research piece.
Suffice it to say, it would be easier for a Democrat to obtain a presidential pardon from the current administration.
Good luck and good trading!
