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Donald Trump Predicts the Stock Market?

Updated on January 9, 2018

Who knows when the Ides of March will roll around for the stock market. Donald Trump seems to constantly praise the stock market as his own vehicle to his own greatness. Some Presidents in the past have alluded to the stock market, but they’ve never attributed their success to it. Trump on the other hand, is the first to tweet on any news of a market rise about how his own self-proclamation acts as a thrust to create new wealth for the American consumer.

Needless to say, it was the market makers and financial institutions that were trading amongst themselves to propel the market to unprecedented heights. Even the Central Banks feel immune to their own frailties because they are awash with liquidity. However, the real analysis comes with the self-realization that all asset classes are increasing while not a single one is decreasing. Once the sequence of uniformity establishes itself it stands to reason that the Central Banks can not have a fall in any asset class affecting their balance sheet.

The market pundits continue to form their own reasoning and stick to the notion that we’re all safe and invincible until the yield curve becomes inverted. Sure this has held true at certain points in history. For example, in 1998 the yield curve finally inverted and led to the stock market peaking two years later in March 2000 before stocks came tumbling down. Additionally, in 2006 the yield curve inverted and was followed with a stock market peak-out in October 2007 before its eventual downfall. That’s why these market pundits proclaim that we are invincible, however this is without the regard of record consumer debt levels and extreme levels of liquidity. Additionally, we have seen countless anomalies of declines of over -20% in 1962, 1976-1978, 1987, 1998, and 2011 without an inverted yield curve which therefore renders this theory obsolete.

The Central Banks and Federal Reserve have effectively wiped out all forms of price discovery that investors once used in predicting future market trends. If the economic cycle is destroyed then the Dow Theory is destroyed meaning the usual booms and busts of any asset class no longer exist. Even without wage growth or corporate growth, the rising market illusion continues to be sustained due to share buybacks in appeasing financial institutions. The real game theory is therefore illustrated through Trump’s proclamation of pumping the market and his perceived notion that corporate governance will invest their profits rather than accumulating wealth and building offshore accounts.

Game theory suggests that the common American who became a millionaire because of rising house prices believes the illusion will continue to prop up their real estate assets. However let’s say the consumer is awash with credit card debt, then this now becomes a maneuver of them touching their real estate assets for the purpose of playing the stock market. Therefore, we come to the conclusion that the yield curve is disassociated with future stock market trends and that the market has a high potential of tumbling without the actual fruition of an inverted yield curve.

If there’s a lack of volatility and fear in the market then the market will rise along with the swamp that is borrowing more liquidity to pound the market and increase its value. However because of the absence of fear in the market, the market assumes a passive role governed by an arbitrary delusion of higher asset prices.

Of course the corporate executives are first to pounce on easy money provided by the Central Banks. These executives are rewarded with their stock compensations, kickbacks, and all the crony infrastructure that aligns themselves with other executives looking to reach the top. They can expect the Fed’s dovish allegiance to prop up the market with the locked-on precision of Donald Trump’s mantra. These executives know that wage growth is an arbitrary tool that fails to meet the expectation of consumer spending habits. The spending habits of consumers are no different than these CEO executives that want their yachts and mansions.

If inflation doesn’t occur and the economy subsequently softens then the Fed will no longer hike interest rates as planned. This means a move where more of the swamp jumps on the bandwagon and re-mortgages their houses while obtaining more credit cards to play the market. The central bankers have to come to terms that the Dow Utilities Index lost over 10% of its value amidst the rising broad market. The Dow Utilities Index has entered a bear market and unless there’s more liquidity transferred to this asset then someone is wrong. If the utilities are not worrisome simply because there’s no fear in the broad market then the market will once again continue to increase as rising expectations dominate the agenda.

If the utilities are proven correct then the stock market should collapse, however this isn’t the case because Trump has played a pivotal role along with the Federal Reserve to prop up all asset classes regardless of current prices. Once the money dries up and becomes a block, the main focus for the institutions will be the hope that the swamp continues to hold the bag and finance their riches. However, if the consumer loses confidence with respect to rising debt levels then reality sets in whereby their assets will never meet their expectations. The Ides of March are not here yet, allow Trump to sustain his magic along with the Federal Reserve.

Thanks to Michael Abrowic for his contributions to this article.

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    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      Also, do you think that insider trading is not done today, or is it just well hidden because everything is on the computers?

      The market makers can short the market to get inventory. Why are you talking about Obama? I would agree most company analyses are untrained. When it comes to money, the herd is predictable.

    • bradmasterOCcal profile image

      bradmasterOCcal 

      7 months ago from Orange County California

      You said you were never wrong, so 2005 to 2010 was before the economic failure, during it, and after it. If you were right then, then I would concede about your boast.

      The principals were not the same as they are today.

      My point about the stock market being human is that buyer's remorse, people being able to react to a moving up market, or down market can be somewhat predictable. But, it is an educated guess, and timing of buys and sells is critical.

      But, what is the stimulus that will move them. There are a series of them available, and each of the government reports is eagerly anticipated, and pavlovian like acted upon.

      The big difference in the stock market came when the Stock Broker was no longer needed, as their were other ways to make trades, and they were much cheaper. But they meant that you didn't have any of the broker's expertise to guide you. So the traditional analysis of different ways of looking at companies to determine whether they are going up, stagnant, or going down was left up to guessing and rumors by untrained investors.

      The use of statistics, math, and other analysis is great when you are trying to determine the quality of a production run. Because the processes are uniform, and sampling is from that uniformity so what is found in sampling pretty much represents the results of the entire process.

      But when we apply these techniques to humans, we are not working with uniformity. We are working with the herd instinct, rebels, rogues, and that makes prediction very less predictable with trends.

      Look at how Trump won the election despite every poll taking, and election modeling analysis. That is the human element.

      The biggest difficulty in this century for applying any kind of math to the analysis is because today the markets are not these things you mention (based on survival of fittest The sequences are based on Darwinian principals and mathematics.)

      The professional investors today are not the brokers, but the fund managers, who can actually tilt the market because of the large blocks of stock they control. And it isn't just one or two of these fund managers, there are many.

      And when you say you have never been wrong, it doesn't give any definition to what you have been wrong about. It was like when Obama ran for president. He said if elected he would change the country, but everyone that voted for him were expecting him to make the country better, but history shows the opposite.

      Also, do you think that insider trading is not done today, or is it just well hidden because everything is on the computers?

      You also cherry picked from my comments, does that mean you agree with the ones that you didn't pick?

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      "Yes, the basis concepts of humans can be seen in the ticks of the stocks market, but tying them to actual events is still a guess"

      If the stock market is not human then what is it.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      What I see in the links is PR, and predictive analysis, when applied to computerizing stock and money market for the investor makes it an educated but not accurate guess.

      Wrong, the markets are based on survival of fittest The sequences are based on Darwinian principals and mathematics. Understanding the trend, when to get in, or when to get out.

      https://seekingalpha.com/article/2262093-the-vix-b... You will see my name in the second paragraph.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      Why 2005 and 2010, when the market principals are the same. Today is the NASDAQ up or down. I have never been wrong.

    • bradmasterOCcal profile image

      bradmasterOCcal 

      7 months ago from Orange County California

      Nothing in your links has to do with 2005-2010 predicting the US economic collapse. What I see in the links is PR, and predictive analysis, when applied to computerizing stock and money market for the investor makes it an educated but not accurate guess.

      Yes, the basis concepts of humans can be seen in the ticks of the stocks market, but tying them to actual events is still a guess. The FRB was one of the big factors that allowed the Real Estate bubble to grow, even though in 2007 there were already signs and cautions that weren't heeded by people in congress and their economic advisors that could have stopped the bubble before the economy crashed, or lessened the magnitude of the bubble.

      The FRB was one of the prime factors because the controlled the interest rate for the loans, and they kept it too low for too long allowing the loans to continue. The loans broke every rule of equity in the loans, and that was also where the Freddie and Fannie government insurers help the bubble increase.

      If the FRB would have increased the interest rates as they are expecting to do now, many of the loans from the real estate bubble would have crashed. And those crashes would have domino-ed in 2007. It would have put the light on them, and it would have been an important point in the 2008 presidential campaign.

      The same thing happened with the dot com bubble, the deviation from the conservative stock broker mode of investing, went out the window when the twenty something batch of MBAs decided they didn't want to work their way up the ladder. They came up with the equivalent of making penny stocks into to blue chips, by incentivizing greed. Stocks from start up went IPO with little more than a name. But like the Real estate bubble, the sharp increase in the stock, and in homes caused everyone to think it was real. The only people that made out in either bubble were the ones that created the bubble.

      So, to answer your comment, no that is not enough.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      "While the Crash of ’87 and 2008 financial crisis have been name-checked, a more relevant example may be 1998, the first test of the internet bubble. It was a period in the market that has some eerie parallels to today"..... Ask yourself if Google and Facebook making money.If the answer is no let the market crash.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

    • bradmasterOCcal profile image

      bradmasterOCcal 

      7 months ago from Orange County California

      Fiorenzo

      The drop in the stock market is a normal and a good correction for the stock market.

      And the FRB is the cause of that drop because they may raise the interest rates.

      The FRB is out of the control of the president, the congress and the country. Like you they are not part of the country. They are private and independent.

      Show me some posts during the 2005-2010 time period to show how you were never wrong.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      7 months ago from 1592 Bloor Street West

      Robert E. Campbell, I hope you are learning from me. The SPY 500 trend is not broken. The big whales may come in and purchase the SPY 500 at, 257.47, 255.16, 251.00 or 250.00. I think you owe me an apology, for calling me stupid.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      8 months ago from 1592 Bloor Street West

      Brad you indicated, "Now you are the one predicting the stock market' I wrote this article along with Micheal Ambrozewick. I have never been wrong.

      https://seekingalpha.com/article/2262093-the-vix-b...

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      8 months ago from 1592 Bloor Street West

      bradmaster,

      You're right, I don't live in the US, but that doesn't mean I can't criticize it or analyze it. With Trump, over the next 10 years the government will collect $1.5 trillion less revenue. The President even had the mitigated audacity to announce that the recent stock market gains were helping reduce national debt, but does this goddamn idiot understand that this is all simply floating paper? It is not realized profit until you sell. These are nothing but certificates that fluctuate because of supply and demand. When demand weans, stocks tumble, just take a look at the flash crash of Bitcoin, or simply study flash crashes in general. You seem to be a smarter guy than Mr. Campbell. The Central Banks are like a drug cartel feeding the crack to the swamp until the bubble finally bursts. Every succeeding bubble was followed by a crash, and every bubble was bigger than the one before it. Thanks for your comment bradmaster, I've got a lot of respect for you.

    • bradmasterOCcal profile image

      bradmasterOCcal 

      8 months ago from Orange County California

      Really

      president Obama beat president GW Bush when Obama doubled the debt. while Bush only came close.

      And Obama didn't get 3% GDP while Trump did.

      Now you are the one predicting the stock market.

      The FRB is not a good thing for the US. They along with others allowed the creation and sustaining of the real estate bubble. And that was a two party bubble.

      And what do you care about Trump's wall, you don't even live in the US.

    • Fiorenzo Arcadi profile imageAUTHOR

      Fiorenzo Arcadi 

      8 months ago from 1592 Bloor Street West

      Robert, did you read the story? Or perhaps you're delusional? I said Donald Trump can not predict the stock market. Does he have some influence on the stock market? Perhaps. Will the US run huge deficits because of his tax plan? Of course. What kind of a Republican is he? He will add more debt than any other President in history, and this doesn't even include his goddamn wall. There's nothing wrong with printing money, however the problem with the US is that they continue to run deficits, do you know what this means Robert E. Campbell? It means they spend more than they collect. Look at the miscreant president; the guy borrows and borrows and borrows, even from the Russians. This man loves debt and he wants to drown Americans into debt. You think if I was the CEO of Apple I'd listen to Donald Trump? I would keep the corporate money in offshore accounts until my organization needed it. Every CEO in America knows that Donald Trump is just a little blip, even the former Republican Governor Schwarzenegger said that. It is you Mr. Campbell that thinks the stock market can go up forever and no one will ever profit from it, including yourself. The markets exist to profit from, to protect capital, how in the goddamn hell is the swamp going to make money if they're the only ones who are paying higher prices for the stocks? Learn to understand the Dow Theory and perhaps one day you'll learn something in your life. It's good that you came on this forum rather than LinkedIn, unfortunately on LinkedIn I have to be very careful with my words, for some reason they call it a "professional site", but sometimes I just hate to be professional.

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