VRA Update: Wayne Root Interview. Trump Wins on China. Next up, 28,000 by Mid-terms. VRA System and Market Update. AAII Sentiment Reading

Good Thurday Morning All. If you weren’t able to join us on the Wayne Root Show earlier this week, here’s the recorded NewsMax TV link, discussing China v US trade, the miracle that is #45 and a forward look at the US/global equity markets for the rest of this year, based on VRA Investing System readings. It’s always fun being on with Wayne, aka the hardest working guy that I know and the best friend anyone could have. Many of you know Wayne so you know what I’m talking about…salt of the earth, through and through. 

Wayne Root Show 5/21/18 (My segment is 34 minutes in): https://www.newsmaxtv.com/Shows/The-Wayne-Allyn-Root-Show

Following news over the weekend that China has agreed to reduce it’s trade surplus with the US, and in exchange we would drop threatened trade tariffs, the markets spiked sharply higher earlier in the week, with the Dow Jones up 298 points and back above 25K. Remember, it was the global tension around Trump tariff threats that marked the January 29th highs followed by the 2 week near-panic level selling of 10–13% in US indexes.

It was to Trumps advantage to put this to bed prior to two main events for the rest of 2018:

1) North Korea denuclearization: Trump needs China as a strong partner in these talks or any deal is highly unlikely. Trump wants this deal in the worst way. If he doesn’t get it, military action is next. Not his first choice but North Korea knows how serious Trump is. I still see the odds favoring a deal. 

2) November mid-terms: Trump knows what Bill Clinton knew; “its the economy, stupid”. Going into November, Trump wants a rip-roaring US economy and a Dow Jones north of 28,000. Thats my bogey prior to the mid-terms and I doubt its much different than Trumps. 28,000 DJ would mean that it had risen some 10,000 points since he was elected….a total gain of 55%. How nice will that figure sound in campaign ads and jam packed arenas…

Think the stock market valuation won’t matter for the mid-terms? We just learned that there are more than 155,000 401k retirement plans worth more than $1 million….another all-time record. You bet where the DJ is come November matters. And folks, this is exactly how Trump thinks…which means trade wars with China should not be on the front page.

As a “very” good faith sign, just this morning China agreed to reduce import tariffs on auto’s. This is big not only for US auto makers (and their employees) but for European car makers as well. The EU has something else to thank Trump for….

VRA System Update

Big comeback in the markets yesterday. After the open the DJ had losses of 170 points but once the FED’s minutes were released, showing that rate hikes would be kept in check as the FED lets the economy run hot, the markets turned higher on a dime, closing higher across the board. 

Again, the VRA has nailed the FED’s movements, under Trump. As I wrote in “CrashProof Prosperity, Becoming Wealthy in the Age of Trump”, Trump has one objective with the US economy; getting GDP back to 4–5%+. He’s locked into this exact mindset….frankly folks, this is all we need to really know. Trump has given STRICT instructions to everyone working for him to “get out of the way of US economic growth. Slash taxes and regulations…force China’s hand on trade…and allow the American entrepreneurial spirit to simply do its thing”. The rest will take care of itself. 

Today, 9/12 VRA Investing System Screens remain bullish. We’ve had 13/18 days with positive VRA System internal readings. While short term overbought, we must continue to buy the dip. Trumps bull market is only in its infancy. If you’re not long, you’re wrong.

Reminder: if you’re not joining us for our end of day VRA Daily Podcast, please sign up at vrainsider.com/podcast

In less than 5 minutes we tell you exactly what happened in the markets, along with VRA Investing System comments. We’ll keep you on the right side of the markets….in the right sectors…and most importantly, in the right stocks. 

Finally for this morning, heres this weeks AAII Investor Sentiment Survey:

With bulls at 38.6% and bears at 25.2%, we are simply nowhere near a final bull market top (according to market sentiment). When the bulls hit 60% for weeks on end…when everyone and their momma is bullish and your Uber driver is telling you about his/her margin account that “can’t lose”, that’s when the VRA will be taking profits. We’re years away from this bull market ending….invest accordingly. 

Until next time, thanks again for reading…

Kip