Forget Trump's Peons

You had Mike Pence act like a tough guy at the APEC 2018 meeting, talking hardball with China on trade, while Xi tried to squirm away from criticism that he is using One Belt One Road as a scheme to trap EM countries as Chinese debt slaves.  Don't forget that Trump is erratic and is not some master commander pulling all the strings.  If what Bob Woodward states in his book on Trump is true, which I believe it is, you have a lot of Trump underlings who don't have any respect for the President and choose to call their own shots. 

Trump is going to make the final call on a deal with China, and it is apparent that he is getting more eager to make a deal as the pressure from Wall Street increases, and the stock market trades weaker, and with the midterm elections over.  What Pence, Navarro, Kudlow, Ross, and the others say are meaningless.  They are probably daytrading secret anonymous corporate brokerage accounts to profit on headlines that they make. 

What a difference a few weeks of market turmoil can make on the Fed.  Suddenly, you have Powell softening his rate hike talk, and all the other Fed members are following the dovish tone like sheep.  As much as the Fed says that they are data dependent, they forget to mention that their most important data point is the SPX.  Not employment or inflation, like their mandate says.  The Fed has veered so far away from what their legal charter states as to make a mockery of the government and its rules and regulations.  Everything is bought and paid for in Washington now.  The corporations have a firm headlock on the political process and will not let go.  In fact, they are emboldened as all of their mergers and acquisitions and collusion are ignored and given a rubber stamp of approval, as they are the ones financing the campaigns of the politicians passing the bills and enforcing the laws. 

We have bounced from the short term oversold conditions last week, hitting bottom at the year end 2017 SPX level of 2673.  I see potential for a bounce up to 2760 as Thankgiving week is usually bullish and the bond market is no longer hampering the rally as risk parity strategies are performing well again. I will use any holiday strength to lighten up on my longs, as I have little medium term conviction on longs.