Wednesday, October 18, 2017

Majority Focuses on Domestic Factors When Analyzing US Stocks

Sounds logical, so it must be true. The majority, which is just beginning to realize that the stock market is rallying, believes things like fundamentals, policies - largely domestic factors are the sole driver of US stocks. They generally ignore international capital flows.

Successful traders recognize early that non-linear trends are driven by human behavior, not mathematical relationships. Accelerating trends are notoriously difficult to trade for the majority. The majority, still neutral on stocks, may not be given an easy entry. If US stocks continue to defy logic, the majority will eventually capitulate and buy aggressive, thus, securing their role as bagholders of major trend transitions.

While the cycle of time defines extended secondary trends for US stocks,  it neither suggests a major top nor decline is imminent.  The cycle of TIME is far less extended for the primary trend.  In other words, an easy pullback may not develop despite the majority's neutrality towards stocks.

Headline: Treasury Secretary Mnuchin thinks a failure to pass tax reform will send stocks tumbling

Treasury Secretary Steven Mnuchin thinks the stock market’s performance depends on tax reform.

“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,” Mnuchin told Politico’s Ben White in a podcast interview published Wednesday.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.