Think what you may of President Trump, but there is an undeniable fact.
If you watch the stock market as closely as I do, you would notice that Trump often has impeccable timing to prop up the market. The timing of his latest announcement hit the bull’s eye. How so? Let’s explore the issue with the help of a chart.
• The chart shows the stock market was falling.
• The VUD indicator, the most sensitive gauge of supply and demand in real time, was orange, as shown on the chart, indicating the supply of stocks exceeded demand.
• The setup was near perfect for the stock market to have kept declining.
• Trump perfectly timed the announcement of a delay in tariffs on cars and car parts.
• As the chart shows, a sharp rally ensued.
• Even the stock of Apple
rallied. Apple presents a significant China-related risk.
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The Trump ‘put’
The prevailing wisdom is that there is a Trump “put” under the market. In plain English, that means there is a belief that the market won’t significantly drop because Trump always props it up.
For the most part, that belief has proven to be correct. But there are exceptions. Does anyone remember December 2018? Investors ought to take the Trump put with a grain of salt.
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. Nigam Arora is an investor, engineer and nuclear physicist by background who has founded two Inc. 500 fastest-growing companies. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.