The late Great Economist John Maynard Keynes famously said:
“Markets can remain irrational longer than you can remain solvent!”
And last week really brought that quote into focus.
If you followed the second quote I made last week you would be very rich right now, in case you have forgotten it was:
“Buy on the Cannon, sell on the Bugle.”
This fundamental event has been the French Presidential Elections, which has been the “Cannon” and tomorrow could well be the “Bugle” upon which to sell. However as with most important events in the world it is happening on the Weekend. Markets are closed on the weekend so one would have to be in early on the Monday Morning Open to see how the Markets react to the outcome.
Nevertheless, it’s difficult to judge whether the outcome of this election will be the trigger to push the markets down. This is because Macon’s standing in the Polls seems unassailable. Other important factors are the European area has been very stable and in the US the Jobs Report known as ‘Non Farm Payrolls’ were a great boost. Even Trump is managing to push through some of his controversial policies.
The Stock market is loving this, and is pushing their all time highs.
What could possibly go wrong?
Who knows. We cannot read the future. I myself only trade on what I see and on it’s possibilities. Last week nothing was going to push the market down before the “known knowns” as Donald Rumsfeld would have said. No Financial Institution has the Balls to act before a “Known Known”, as my old Sergeant Major used to say during our Drill sessions: “Don’t anticipate the Order!”
Despite last week, and even if the markets climb even higher, it’s still only one week into May. The DAX testing the very Big High of 13,000 would on the upside. But being Bearish, things now are very very exciting because if my hunch proves correct, the Market has double the amount of points to drop now. 800 points is a long long way down. Trading GBP 25, 50 or even 100 per point now means even bigger returns. But for that to happen something Big could be just around the corner.
What could it BE?