Major averages got clobbered on huge volume after news hit that President Trump could be impeached after allegations of obstruction of justice involving former FBI director James Comey. Financials were down the most as the news was believed by some analysts to have reduced the odds of Trump getting his tax bill passed. According to Reuters, former US officials claim that key advisers to President Trump's campaign contacted Russian officials and others with Kremlin ties in at least 18 calls and emails during the last seven months of the 2016 presidential race. This could impact Trump's pro-growth tax reform promises.
It would take two-thirds of the Republican controlled Senate for an impeachment to occur. British bookie Betfair put the odds at 55% of this happening. While the impeachment process takes at least a number of months if not longer, the status quo establishment pushed hard for Clinton to win at all costs, and have stopped at nothing to discredit Trump via major media and other outlets. The question is will they use all their firepower to impeach Trump. No doubt, Trump will not go down without a fight. Perhaps this catalyzes growing civil unrest into something far more disruptive?
Focus List Review
Leading stocks were hit hard yesterday across the board, and our strongly-performing Focus List names were no exception. Yesterday we saw FB, NFLX, and TSLA all breach their 20-dmas, which in our view is a short-term sell signal. Others may choose to use the 50-dma as a wider selling guide, depending on one's risk-preference.
Other names, such as AMZN, and SQ have dropped below their 10-dmas, and in each we would look to use the 20-dma as a maximum downside selling guide. Aside from these five stocks, all other names in the Focus List are holding above their 10-dmas. Thus members may choose to use the 10-dma as a tight selling guide for positions they may still hold and which are holding up above the 10-dma.