Trump’s Shenanigans are Good for Stocks [2 Must-See Charts]

The whirlwind romance was over before it began.

Donald Trump and Kim Jong Un flirted for weeks. But when it came time to meet face to face, Trump decided Kim just wasn’t his type. He sent a note instead.

Where the talks with North Korea go from here is anyone’s guess.

“Trump has always led from the gut. But the president’s recent head-snapping decisions, made without much consultation with allies overseas or in Congress, suggest a White House that is winging it on almost every major issue,” Bloomberg reports.

While world leaders and the media remain baffled by Trump’s actions, the markets are taking them in stride. Every Trump-influenced event appears to follow the same formula. First, Trump changes his mind overnight. This causes futures to drop. The next day, everyone expects the market to open deep in the red. But stocks crawl back from the brink. Stocks sneak higher into the afternoon. The major averages then close in the green by the closing bell.

Remember, burying your nose in the news won’t lead you to stock market profits. As far as the market is concerned, the “crazy” political climate we’re experiencing right now is nothing but a sideshow.

Even with all the political distractions in the world, the major averages continue to improve. Stocks are building off their recent gains and new market leaders are beginning to emerge. It’s a great market to find new trades.

Meanwhile, commodities are flashing some compelling signals as the trading week draws to a close.

Let’s go to the charts to see what’s in play right now:

1. Crude finally cools

Oil has blasted higher for the better part of the past three months to prices we haven’t seen since 2014.

But the rip-roaring oil rally looks like it’s ready to take a short break.

News that Saudi Arabia will boost the supply of crude is sending oil tumbling below $70 early this morning. It’s crude’s first trip below $70 since May 9. A barrel of West Texas Intermediate is down more than 2% so far today.

oil

Energy stocks have pulled back over the past three sessions. Another day of lower prices should help some of these comeback names blow off some more steam after posting strong second-quarter rallies…

2. Can gold find a floor?

Gold tumbled below $1,300 last week. It was gold’s first dive below $1,300 this year. Higher treasury yields and a red-hot U.S. dollar are helping to depress gold prices.

Last week, we showed you how gold had dropped into the red for the year — and it didn’t look like conditions would improve for precious metals anytime soon.

But I might have been dead wrong. Right now, it looks as if gold is trying to find a floor near $1,300.

gold

Gold stabilized after last week’s big slide, trading in a tight range just below $1,300 for six sessions.

But gold came back to life yesterday. It gained almost $15 despite a strong US dollar. This morning, it’s hanging onto its gains even as the dollar blasts to new 2018 highs.

If $1,290 is gold’s new floor, it would mark an important higher low in precious metals trade over the past year…

Sincerely,

Greg Guenthner

You May Also Be Interested In:

Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

View More By Greg Guenthner