Time to Put Away Panic and take up Analysis…

Last Friday our Climate Tech Model pointed to the fact that based on what everyone knows at this point, the markets have declined into an oversold value zone. What is important now is the actual impact of the tariffs and deregulation on economic growth. Where the markets are now may well be correct as to the value of the market at year end if all this turns into a boondoggle. But in the intervening eight months there will be a lot more lies, and hype thrown into the analytic mix.

So, I think this is a time to dig into the analytics and take on value. I don’t think that means to buy a rally, be patient, most of the news this week should be bearish and any bullish news will probably be discounted.

Update at 10:30 AM CDT

We have seen a good dose of volatility in the first two hours of trading today. To me the analytics continue to point to this price level being a value zone.

This looks like it could be the start of a watershed week. I say this based on responses over the weekend from MAGA people I know. Unfortunately, I know too many due to my agriculture and trading background. But anyway, they are sharing that they voted for Trump because of his vow to make government more efficient and reduce the deficit. The result so far is that the things being cut are mostly related to health care. No cuts to the biggest line item, defense, which we will need less of due to the isolation direction of Trump.

Then for them the big Boondoggle is the tariffs which appear to be totally an ideologue play and make no sense. To me hope that Trump will back down on tariffs explicitly is non-sensical. He will roll around the subject to the point that no one will know what the subject was initially. A combined action by Congress is the only logical move. That would be historic, but unlikely unless things get really bad.