Biden has enough on his plate

Abraham George Macro View

So Trump was impeached for a second time. No president has been impeached two times. But it is reported the Senate won’t reconvene before the inauguration of Biden’s presidency to hold a trial.

The intention of the Democrats appears to not be for a removal. They want to make sure Trump doesn’t come back for a second term again. So the Senate can take this matter up again and hold a trial after Trump is out.

This will all lead to further divisions and anger expressed from both sides of the aisle and make Biden’s job much more difficult. The political, economical and pandemic chaos within the country can only give China an edge in its race to be the next super power.

Equities

The Dow continued to make progress in its five wave rally that we have been discussing. The minimum expectations are that it should move above the Jan 07 high before it makes a top.

The S&P 500 slipped to 3776 which is below the 3784 level of Jan 8 that we had cited. However the Dow did not go below the equivalent low of Jan 8 at 30,793. The patterns and sub wave divisions are complex but we still favour the markets progressing higher before it can find a significant top.

Bonds

Bonds did make a corrective rally but looks like it was short lived. Or it may find more complex formations to make a bigger snap back rally. Whatever it is our focus is on the downside.

Euro

The risk for the Euro has clearly turned down. First supports are at 1.2060 and would look for any higher levels to be short. Think there are bigger potential on the downside.

Gold

The rally in gold from 1819 on Monday to 1864 is a countertrend rally. There could be further moves to 1880 or even 1900. Whatever it is prices should not move above 1959. A move to 1765 the low of Nov 30 2020 is more favored.

Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.