Patience frayed last week as markets engaged in a secondary-test (even a double-top) by the S&P; while NASDAQ made consecutive higher highs; for sure reflecting rotation and those somewhat bifurcated Index patterns. A majority of ‘retail high-wealth’ selling was ongoing for a month as we noted both from BofA/ML and JP Morgan sources. I expressed the opinion that it was the ‘algo-driven’ hedge and institutional crowd that kept this alive.

So the market has played a sort of ‘Chicken Little’ game with psychology, at the same time it was pretty obvious to us that ‘legislative priorities’ were the problem kid on the block for this market; in-essence a sort of ‘black swan’.
 

That was my view at least, whereby I thought the Healthcare legislation was overly-complex for the Administration to take-on initially, and perhaps doing so was a concession by Donald Trump to Speaker Ryan months ago for his support. We may never know that; but only now everyone agrees with me in regards to the ‘stalling’ of healthcare likely stalling tax-reform as well. That’s been for months my number one concern of how they’d explain a reversal.

Its been my thinking that Trump preferred to address ‘tax reform’ and capital repatriation sooner, and reluctantly went-along with this approach. Mistake in my view, and more significant than all the chatter about Russia (sure, that presumes it’s infighting or nothing that triggers a Constitutional crisis later). 

That normally should have been on the back-burner had the Administration of course not have been compelled to divert some focus to that challenge. At the same time, if you ‘do’ see further degradation of perceptions of the President’s Administration (needless to say there’s no more Honeymoon), and if you have both stalled legislation and a crisis due to efforts trying to tie Trump’s campaign to Russia; well then you have a serious ‘flock of swans’.