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Chris Lau

​ Happy Tax Reform Day

The house passed the tax reform. Happy day for stocks.

What's next?

From nrps400: 
Next stop is the Senate, where the vote margins are substantially slimmer.
If the Senate approves a bill it goes to reconciliation, where any differences between the two bills must be resolved by a House-Senate committee to produce a uniform bill. 

That's how, for example, the ACA mandate repeal could end up in the final bill even though it is not in the House. Then that compromise bill goes back to each chamber for a majority vote.

The final compromise bill still has to meet the Byrd Rule in the Senate, and the vote margin is razor thin, so the Senate has a lot more leverage in reconciliation negotiations. Essentially, the final bill is likely to look a lot like the Senate bill (assuming one passes).

Some in the House have balked at the current Senate proposal, but I suspect when the compromise bill is actually on the table, Ryan will be able to whip the votes. 13 Republicans voted "no" on the House bill, and they can "afford" to lose about 10 more and still pass a compromise.
This was a small step, but the most important step in the process is whether the Senate can actually pass a bill.

GE did not celebrate. The stock continued its drop today. 

WAL-MART - WMT - jumped over 10% to nearly $99 after reporting an incredible quarter.

$WMT, WAL-MART STORES Inc / H1


As predicted, VIX is imploding, down ~10%. No volatility when markets rally higher.

AMD, which lost steam as momentum faded, rose a modest 1.8%. $12 next?

in biotech, Valeant - VRX - and Teva did not move by much. But Synergy - SGYP - regained the $2/share level.

Himax - HIMX - showed lots of life as it rallied 8.7 percent intraday to $11.80.

  • 2 2 correctly predicted forecasts
    MasterTheDream
    I made a little on DIA short but switched today on this Gap up. Markets will rally higher if tax reform is done
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  • 108 108 correctly predicted forecasts
    Long/Short Investments
    MasterTheDream, What kind of trading style do you do?
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  • 2 2 correctly predicted forecasts
    MasterTheDream
    Trading Gaps and break outs from support channels mostly. Today was a great day. I caught WMT, SJM, and SHOP gap and go's and was in MD from $45 when it broke the sideways accumulation channel
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  • 108 108 correctly predicted forecasts
    Long/Short Investments
    MasterTheDream, I see. Glad things are working out well.
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  • 108 108 correctly predicted forecasts
    Long/Short Investments
    Tax bill is a net plus for the economy, especially in the short-term, and for risk assets. Downside is that winners and losers in the tax bill are arbitrary, it probably won't pass the Senate in its current form, and the US has a massive debt liability problem that won't go away.

    Total IOUs of the US, when you combine gov't debt, private debt, Medicare, Social Security, pension liabilities, and "other" comes to a mind-boggling 1,100% of GDP.

    This is going to be a massive long-term squeeze on the country's economic health. Politicians today and of yesteryear spent too much money they didn't have in order to buy votes and prolong their careers. Ginormous levels of fiscal irresponsibility have resulted accordingly.

    So this whole thing about Fed tightening monetary policy to 3% is a complete joke. The terminal fed funds rate is not that high. Private investors generally tend to be more in the know than the technocrats in the Fed, as they're disciplined by the markets. Many of them are idiot savants who rigidly adhere to shoddy Keynesian theory, a lot of the same garbage they teach in universities.

    Moody's forecast of a 4% 10-yr by 2019 is delusional.
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