We had expected the stock market to rally sharply if the Republican party had held on to the House, which is why we dumped our soon to expire Apple Puts at the good profit beforehand, but we had not expected a rally of the magnitude we saw yesterday if they lost it. So what is going on? On one level, the simple argument that the market is rallying because the election is over and the uncertainty associated with it is also over holds water, but thinking it through there is more to it than that. Even though it is normal for the party in opposition to retake ground at the mid-terms, and to retake the House, the results of this election represent a victory for the Deep State over both Trump and the American people. Why? – because Trump no longer holds a clear mandate, and the Democrats will work to frustrate and stymie any attempts by him to make significant changes during the last 2-years of his Presidency, which is why, despite Trump putting a brave face on it, he was fuming after the election, and vented on that CNN reporter in the White House press conference, who has since lost his White House press pass.
The reason that the stock market rallied so much yesterday, after the election results became apparent, is that it was a celebration by the Deep State of their victory over Trump and the people. The chief beneficiaries of the 10-year bull market in stocks have not been the “little guy” or the middle class, but big powerful interests, the fabled 1%. The majority of the population can barely pay their bills and have received scant benefit from the stock market boom. So what we saw yesterday was Big Money celebrating the hobbling of Trump. Trump is now a “lame duck” President who will not be able to make the “root and branch” changes necessary to bring the country back to a state of relative normality. Even after he took office he had the common sense to realize that if he wanted to continue to live and breathe, he would have to kow-tow to the powers that be, which is why he prostrated himself before the Israel lobby, the Military-Industrial complex, and even Saudi Arabia. Now, however, after the Deep State controlled Democrats have retaken the House, matters are out of his hands, since any significant attempt to take on the power of the Deep State will in effect be vetoed by the House, so to put it succinctly, they have got him where they want him. However, they have only got him where they want him until 2020 – Trump should not be underestimated, despite his quirks, and if he gets re-elected in 2020 and succeeds in taking both houses, he could be back on track to make some big changes, but in that case he will need effective personal security, as they will probably try to physically eliminate him.
