Healthcare Bill

All are waiting for the vote on the House healthcare bill.  Fast Money traders seem confident that the bill will be passed, and that the market will rally on that news.  Of course, I would question that view.

First of all, the House passing the bill doesn't mean that the bill becomes law.  It also has to pass through the Senate, which will be a much tougher task, because there are already quite a few moderate Republican Senators looking to vote no, along with a few extreme conservatives.  And Republicans only have a 52-48 majority, making just 3 no votes enough to torpedo the bill.

I wouldn't extrapolate the results of the healthcare bill to anything on tax reform.  Tax reform will be the easier of the two to get through Congress.  In fact, the healthcare bill has gone more favorable for the Republican leaders than I originally thought.  It is a politically toxic bill, but Trump apparently has done some threatening to the lower members to jam it through.  Tax cuts will be MUCH easier to pass.  If anything, over the medium to long term, it makes me more optimistic that tax cuts will be enacted, because it shows how Republicans are hell bent on getting through their agenda, popularity be damned.

I am looking to short any brief strength we get on the healthcare bill passing the House.  Its importance is being blown way out of proportion.  I find it interesting that there are very few mentions of the French elections despite the selloff.  That just means that the bears still have that card to play if they want to make a raid on this market.  And it is an Ace up their sleeve, because the fears of a Frexit is exponentially greater than any fears of a Brexit.

Remain bearish SPX, and would short any kind of rally on the House bill passage.  I expect that rally to be very brief, most likely less than a day.  And if that bill doesn't get passed? Well, you will most likely see a fat gap down on Friday.