Comey for Show, May for Dough

Comey for Show, May for Dough

Comey for Show, May for Dough
Comey for Show, May for Dough Getty Images

The market always tells the truth and if you were wondering which event yesterday was more important, the James Comey hearing or the UK elections, you were given the answer by the markets. Fired former FBI director James Comey testified before the Senate Intelligence Committee yesterday to discuss his conversations (and the documentation of those conversations) with President Donald Trump. He came across as honest and sincere while going over everything we already knew in a bit more detail. The Comey hearing was a worse dud than the last few North Korean missile launches, from a market perspective. The UK election on the other hand, was more like a US missile intercept test…worth watching.

In our world, it doesn’t matter what the media tells you is important, because we have a much more reliable source of measurement; price. The 3 major US stock averages; the Dow, the NASDAQ, and the S&P 500 moved to a slight gain from a slight loss as the Comey hearing went on, concluding the day up 0.04%, 0.39% and 0.03% respectively. Wow, be still my nervous gut.

The UK election however, was an episode of “Breaking Bad” for Theresa May and the Conservative party (sometimes known as the Torries). After calling for a snap election on April 18th to strengthen her party’s hold on Parliament (they had a 17.5 point lead in polls at the time), Prime Minister May’s conservatives actually lost 15 seats and lost their majority. She increased the percentage of votes the Conservative party received for Prime Minister versus former Conservative David Cameron, but ended up with a hung Parliament and will now have a tougher job managing the Brexit talks. The GBP fell approximately 2.6% from high to low encompassing multiple binary strikes, as exit poll results initially suggested she might even lose the Prime Minister-ship.

Comey for Show, May for Dough

The lesson as always is learn your price action. Price on a chart shows you what the masses are thinking about events, which may move markets. It shows you the way traders may be positioned and what moves may be coming. Those moves will be driven by news, but more importantly they will be driven by people’s perception of the news, it’s importance, and  it’s effect on the positions they have in place or hope to get in place. What you think does not matter. A trader may show arrogance outside of his trading chair, but thinking you are right when a market is moving against you is a recipe for financial disaster. So while you may have found significance in the Comey hearing for your personal view of President Trump and James Comey, from a trading perspective the UK election was the money maker.

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