The Only Chart "Trump Traders" MUST SEE

If history is any guide, we know exactly when the Trump Bump will finally fizzle…

In fact, the giddy market conditions we’re experiencing right now will most likely disappear long before The Donald has a chance to redecorate the Oval Office.

The election results were finalized over one month ago. But the powerful market move continues to baffle many of Wall Street’s very serious strategists. In their never-ending quest to explain the stock market’s every tick, they can’t help but slap a gold plated TRUMP sign on this raging bull—and then pout when everything doesn’t go exactly as planned…

‘You don’t have to call it a Trump rally,” MarketWatch muses. “But some market specialists appear to be struggling to pin a name to the recent moves across global markets, which has pushed the S&P 500 index, Dow Jones Industrial Average, the Nasdaq Composite Index—and most recently the Dow Jones Transportation Average—into record territory since President-elect Donald Trump’s Nov. 8 victory over rival Hillary Clinton.”

The wild moves continued today—this time to the downside. The Fed raised rates exactly as it said it would. The 25 basis-point hike was baked into the pie. But that didn’t stop manic traders from pounding the sell button once the hike became official at 2 p.m.

Is this the end of the line for the rally?

At least one famous fund manager doesn’t think the market’s out of ammo just yet.

DoubleLine Capital’s Jeff Gundlach says the euphoria won’t fizzle until just after the inauguration. When a political party reclaims the presidency, Gundlach notes that the post-election rally historically lasts until just after the inauguration in late January.

That’s when reality starts to creep back into the picture…

postelection-dr

Remember, history doesn’t repeat—but it does rhyme. Using past election cycles are our guide, we can expect a rabid market to chill out and drift sideways a bit once Trump takes the oath of office.

But these observations aren’t going to stop the gripes from the sold-out bulls…

Ever since stocks started sprinting higher a few weeks ago, investors have complained that the market has risen too far, too fast. And they’re probably right.

But this is the nature of the beast.

Markets will never trade at an ideal price. The animal spirits are simply too powerful. Crashes always end once investors start overacting to every little piece of bad news hitting the wire. On the other hand, rallies aren’t exhausted until every last bear throws in the towel and joins the parade…

Thankfully, we’ve been down this road before. This time ain’t that much different from the last.

This morning, markets continue to spin in reaction to the Fed’s tightening schedule. The U.S. Dollar is ripping to highs we haven’t experienced since early this century. Meanwhile, gold is down almost 3% as I type.

The financial media will no doubt spend the day bickering about why this is all happening. On the other hand, we’ll stay the course as the post-election melt up continues to pay dividends…

Sincerely,

Greg Guenthner
for The Daily Reckoning

The Daily Reckoning