"The rally in the face of today's data (detailed by Peter Boockvar in the previous post) tells me how much machines and algos dominate trading:

• a mild winter goosed construction jobs
• service job data is so-so
• ISM services has just given back the entire post-election rise

It might be time for a Ludacris forecast."

-- Kass Diary, A Data Defying Rally (posted at 10:40AM) 

The intra day market reversal (it was Ludacris!) -- the largest in over 14 months -- had its roots in the following factors:

* Boca Biff turned wildly bullish.  (Mark your calendar and time of the day!)

* Speaker Ryan's cautious tax reform comments a bit after 2PM. (Also, my book and theme).

* Some Fed officials viewed stocks as "quite high."  and here. 

Is the President up to the task? (See Ryan's remarks above)

Gundlach is a smart dude. And Danielle is a smart dudette. 

Hanson on home haircuts. 

Apple product delays? 

Hard economic data cooling off?

The Russell Index weakness was a tip off, after all! (At the close IWM -1.3%)

"For Traders Only": Obstetrician (in at $0.19) and Mortician (out at $0.79). 

I sold my TBT for a nice profit, but late in the day I added to my bond short (iShares Barclays 20+ Yr Treas.Bond (ETF) (TLT) . 

I covered my trading tranche of some levered inverse ETFs near the close. 

The "Trade of the Week" (short Nasdaq) moved back into the black by the close.

I remain net short.

Lows of the day at close.

* The US Dollar weakened modestly.

* The price of crude oil was off small and closed at $50.84.

* Gold was flat - well off the lows. But I know likey.

* Ag commodities: wheat +2, corn +1, soybean +6 and oats unchanged.

* Lumber +5, reversing recent weakness.

* Bonds rose in price (and fell in yield) after post FOMC price weakness (see above). I shorted the strength late in the day.

* The 2s/10s spread flattened by 1.5 basis points and is now down to 109 bps.

* Municipals had a small bid. But, closed-end muni bond funds were lower.

* High yield was lower, in a slight way.

* Blackstone / GSO Strategic Credit Fund (BGB) lower by a nickel.

* Bonds closed lower, led by Boca Biff's fave long, JP Morgan Chase (JPM) (-$1.20)

* Insurance sold off but Hartford Financial Services (HIG) held up fairly well.

* Retail closed mixed.

* Autos remain value traps and sold off.

* Ag equipment was flat.

* Media was mixed again.

* Energy stocks fell.

* Transports lower.

* Consumer staples were mixed. Campbell Soup (CPB) held up.

* Big pharma sold off.

* Biotech was -1.5%. Speculative biotech got hit.

* New low in the object of my continued disaffection, Vertex (VRTX) .

* (T)FANG sold off with only Amazon (AMZN) higher (and modestly so). Boca Biff's fave, Tesla (TSLA) down near double digits.

Here are some value added contributions on our site today:

1. Jim "El Capitan" Cramer on market craziness (of a growth kind). 

2. I loved jim's Mad Money segment last evening. 

3. "Meet" Bret Jensen on the second-quarter outlook. 

4. RevShark on the weak close. 

5. Divine gets spastic on us.

I have added to my iShares Barclays 20+ Yr Treas.Bond (ETF) (TLT) short at $121.35 just now.

I have covered my trading (rental) tranche put on recently in ProShares Trust UltraPro ShortQQQ ETF (SQQQ) and ProShares UltraShort S&P500 (ETF) (SDS) .

As promised I am trading optimistically with reduced dogma.

I just sold my SPY $235 weekly puts that I paid $0.17 for today at $0.75.

Good trade!

OMG.

I couldn't make this up.

I just got a call from my old pal, Boca Biff.

I haven't spoke to Biff in several months.

I will expand upon my conversation with him, but the bottom lines are:

* Boca Biff is "all in" long.

* The markets are set for an explosive move higher. (This afternoon he purchased two leveraged long ETFs on the S&P and Nasdaq Indices) "You aint seen nothing, Dougie" was his exact words.

* The market's advance will be led by Tesla (TSLA) and Amazon (AMZN) . (He is buying out calls on both stocks, in size).

* His second largest purchase today were the banks -- see his rate expectations below (I kid you not -- he told me JPMorgan Chase (JPM) , his fave non TFANG stock will trade at par by the end of May)

* Boca Biff also likes the homebuilders (Toll Brothers (TOL) and KB Home (KBH) ), remodeling plays (Home Depot (HD) and Lowe's (LOW) ) and life insurance stocks (Metlife (MET) Hartford Financial Services (HIG) and Lincoln National (LNC) )

* He thinks skepticism on the Trump agenda is unjustified. Boca Biff sees Real GDP at +4% in 2018 and the 10-year yield at 3% in early summer (which makes me uncomfortable because I am short bonds). He is long TBT (ugh!)

Mark the date and time. 

As is typical, I found Peter Boockvar's FOMC analysis to be a very worthy read:

As we heard from a slew of Fed members over the past few weeks including 2 of 3 troika members (Fischer and Dudley), I wasn't expecting much new in the just released minutes and we really didn't get it. I like to joke that some said this, several said that, many said here, a few said there. It's apparent that the Fed is on track to hike rates two more times this year as many seem to believe that any fiscal stimulus won't be felt until 2018. They of course discussed the other elephant in the room with that being what to do with their outsized balance sheet and how to shrink its size.

On this, "Several participants indicated that the timing should be based on a quantitative threshold or trigger tied to the target range for the fed funds rate. Some other participants expressed the view that the timing should depend on a qualitative judgment about economic and financial conditions." The bottom line on timing, is it "would likely be appropriate later this year." Whether it's a hard stop to reinvestment or a tapering of them remains to be seen. They gave pros and cons for both. I'll say this, they can unroll this in any way they want but whatever they do, it will be another form of tightening and considering how drunk markets got on QE and the expansion of the balance sheet, I have to believe there will be a strong sobering up when the reverse is underway. It just might also come during the same exact time the ECB is laying out the full end to their QE and negative interest rate scheme as well. It could make the September-October time frame quite interesting for markets as the 3rd hike this year might come in September.

In addition to the discussion on the economy which was mostly quite positive and while acknowledging that inflation is about in and around their target, they did say this about stock prices: "Broad US equity price indexes increased over the intermeeting period, and some measures of valuation, such as price to earnings ratios, rose further above historical norms. A standard measure of the equity risk premium edged lower, declining into the lower quartile of its historical distribution of the previous three decades." They should look at some more valuation metrics than this if they want a full gauge of valuations. They also said "the rise in equity prices over the past few months" contributed "to an easing of financial conditions."They also pointed out the rally in other risk assets "such as emerging market stocks, high yield corporate bonds, and commercial real estate, had also risen significantly in recent months." We also know the Fed's history in talking about market valuations of any kind.

They again talked about the low neutral rate which they believe gives them cover to only gradual raise rates. I like James Montier's from GMO's view point of this rate: "There is no evidence that such an interest rate exists -- it is purely an unobservable creation of economists, beloved by central bankers."

Bottom line, the Fed is trying to thread that needle of the perfect world scenario of slowly raising interest rates so as not to upset anything, at the same time though getting way behind the 8 ball in going so slow. They want to shrink their balance sheet nice and quietly but know its potentially disruptive because they learned the buoyant reaction when it expanded. They want to normalize rates but are worried about the reaction in the credit/interest rate dependent areas of the economy considering all the leverage that has been built up. See auto's and parts of commercial real estate where it's very difficult for a develop to now get a bank loan and the debt to ebitda ratios for corporate America. They want to get out from underneath this extraordinary policy without crashing the markets that they themselves are now acknowledging are expensive. Good luck for the sake of all of us.

I have been dead wrong on my "Trade of the Week" thus far.

Some Fed participants viewed equity prices as quite high relative to standard valuation measures. It was observed that prices of other risk assets, such as emerging market stocks, high yield corporate bonds, and commercial real estate, had also risen significantly in recent months. In contrast, prices of farmland reportedly had edged lower, in part because low commodity prices continued to weigh on farm income. Still, farmland valuations were said to remain quite high as gauged by standard benchmarks such as rent-to-price ratios.

• In particular, participants agreed that reductions in the Federal Reserve's securities holdings should be gradual and predictable, and accomplished primarily by phasing out reinvestments of principal received from those holdings. Most participants expressed the view that changes in the target range for the federal funds rate should be the primary means for adjusting the stance of monetary policy when the federal funds rate was above its effective lower bound.
• Many participants emphasized that reducing the size of the balance sheet should be conducted in a passive and predictable manner. Some participants expressed the view that it might be appropriate for the Committee to restart reinvestments if the economy encountered significant adverse shocks that required a reduction in the target range for the federal funds rate
• To promote rapid normalization of the size and composition of the balance sheet, one participant preferred to set a minimum pace for reductions in MBS holdings and, if and when necessary, to sell MBS to maintain such a pace.

More to come!

On Monetary policy: 

Danielle Dimartino's "Is The Fed Balance Sheet Heading Towards the Crapper"  is a great read!

Some subscribers (discussed in the Comments Section) have expressed interest or are involved in the optical space.

I am hearing some vague Chinese concerns.

Oclaro (OCLR) , Finisar (FNSR) ,AcaciaCommunications (ACIA) and LumentumHoldings (LITE) are all under pressure today.

I am digging further and will keep you informed of what I learn.

Real estate maven Mark Hanson on house price "haircuts":

I have said for a few quarters that the "era of aspirational prices for houses" is over.

Since 2H last year, list and sales price haircuts, many of double-digits percentages, have become outright common. This, is in contrast to 2014/15, when headlines of bidding wars took prices double-digit percentages above list-price.

In fact, it was those '14/'15 bidding wars and sexy headlines that created the bag-holders, rushing to cut prices, now.

When you pour through data at the upper-mid to high end segments in the highest-beta markets in the nation - the exact ones that led Bubble 1.0, crashed first, and led Bubble 2.0 from the ashes -- houses that are selling the quickest are the ones with rational, sometimes "price-insensitive", sellers.

Further, a notably large number of houses that sold in Q1 were ones listed last year with no success, pulled from the market for the slow season to "refresh" the listing, and put back on at steepest discounts this year.

This new trend is also a large part of why supply is so much lower this year...when Realtors tell sellers they can't get $1 million for their $750k house any longer, many don't - or can't - sell.

Haircuts may keep 2017 sales volume from a hard step-lower after all the rate-fear demand pig is through the python (my forecasts are for Builder and Existing Sales to be down less than 2% each in 2017yy). But, as houses with haircuts make up more of the market share, it's a house price negative nobody is factoring into their models.

All that it takes is a few sales within a one square mile area to "reset" the price of all houses, up and down. As more houses are impacted and sales occur, square miles overlap and the price trend spread like a virus until before too long clear trends appear and new narratives are born. By the time the new trend is obvious to "everybody else" and the media, house prices are on a one-way track, which can go on for years, until some sort of catalyst derails it.

List and sales prices haircuts are viewed as a positive by macro analysts because they only care that 'more' of something occurred, which in this case, would be sales (theorized, due to prices dropping).

But, to builders, for example, there is nothing good about the resale market -- 90% of all home sales in the nation -- playing "list-price haircut leapfrog."

A Couple of Examples of "List-Price Haircut Leapfrog"

Below are just a couple of sales over the past couple of quarters I pulled up as examples.

These are so frequent that the following were the first two sales I clicked in each area.

There was nothing remotely like this price action back in 2014/15, which I believe, in retrospect, analysts will come to see was the Bubble 2.0 peak.

I could have listed 100 deals in each area like this, but the effort is futile...list price haircuts and leapfrog is the new trend, is a wildcard to US house prices, and will continue to accelerate this year.

Arizona

Price History

Date	Event	Price	$/sqft	Source
02/21/17	Pending sale	$1,450,000	$235	North Scottsda...
12/29/16	Price change	$1,450,000-3.3%	$235	North Scottsda...
09/08/16	Price change	$1,500,000-9.1%	$243	North Scottsda...
07/29/16	Price change	$1,650,000-10.8%	$267	North Scottsda...
07/11/16	Listed for sale	$1,850,000	$300	Berkshire Hath...

https://www.zillow.com/homedetails/2885-E-Robin-Ct-Gilbert-AZ-85296/8237567_zpid/?utm_source=email&utm_medium=email&utm_content=morechart&utm_campaign=emo-homereport2-button#zestimate

SAN FRAN

07/06/16	Sold	$4,725,000-5.4%
06/25/16	Pending sale	$4,995,000-9.1%
06/02/16	Price change	$5,495,000-8.3%
05/09/16	Price change	$5,995,000-17.9%
03/05/16	Listed for sale	$7,300,000+32.7%

https://www.zillow.com/homes/recently_sold/San-Francisco-CA/house,condo,apartment_duplex,mobile,townhouse_type/15065707_zpid/20330_rid/1000000-_price/3744-_mp/12m_days/priced_sort/37.924836,-122.261525,37.711121,-122.630253_rect/11_zm/3_p/

High above the Alps my Gnome is hearing that Bannon is off the National Security Council in a shakeup just now.

Stay tuned.

I've recently established a new occasional feature called "For Traders Only," which will offer ideas for traders with aggressive, short-term time frames.

This week's trading idea is to buy the weekly (April 7, this Friday) SPY $235 puts at $0.19.

This category of trades are highly speculative and for traders only, so be prepared to rip up the tickets if the market is stable or heads higher.

The first index to show any kind of weakness is the Russell ^RUT , again today.

But I have been incorrect in viewing this as a cautionary sign (of a possible sell off) in recent trading sessions.

The rally in the face of today's data (detailed by Peter Boockvar in the previous post) tells me how much machines and algos dominate trading: 

• a mild winter goosed construction jobs
• service job data is so-so
• ISM services has just given back the entire post-election rise 

It might be time for a Ludacris forecast.

The Lindsey Group's Peter Boockvar on the latest economic data: 

The ISM services index for March moderated to 55.2 from 57.6 in February and is below the estimate of 57.0. It's now at the lowest level since October when it was at 54.6 just before the election. New orders fell 2.3 pts to 58.9, the lowest since November and not much different than the October print of 57.7 and below the one in September at 59.6. Backlogs fell 1 pt to 53 but after rising by 4 pts last month. Employment was disappointing as it fell by 3.6 pts to 51.6, the lowest since August. As stated this morning, the service sector job gains in the first 3 months of this year according to ADP is at the same run rate as seen in 2016. Export orders jumped by 5.5 pts to 62.5, the highest since May '07 but only 11 of 18 industries have them. That said, it could be a nice tell on the better economies overseas. Prices paid fell 4.2 pts to 53.5, the lowest since September and which is two months removed from the highest since 2014. Of the 18 industries surveyed, 15 saw growth vs 16 in February. The three that saw contraction was in Information; Educational Services; and Professional, Scientific & Technical Services.

The ISM did point to government unknown's as the key reason for the decline m/o/m. They said "The sector continues to reflect growth; however, the rate of growth has declined since last month. The majority of respondents' comments indicate a positive outlook on business conditions and the overall economy. There were several comments about the uncertainty of future government policies on health care, trade and immigration, and the potential impact on business."As for the soft employment component, just 9 of the 18 industries surveyed are increasing payrolls vs 11 in February. Six industries shed workers vs 4 in the month prior. The pace of private sector job gains according to ADP in the first 3 months of 2017 is down a hair from the average in 2016.

Bottom line, as the markets are ripping higher on the data today, it seems to be only in response to the weather induced pick up in construction workers and a nice increase in manufacturing jobs. The 80%+ of the economy that is services has more mixed news today. As seen in ISM, confidence is still high but it's clearly cooled since the post election driven euphoria.

Markit also reported its version of services and its index fell 1 pt to 52.8, the weakest since September when it printed 52.3 and vs 54.8 right before the election. They also confirmed the weaker services hiring that ISM did as their index fell to the lowest since October. Markit said "the loss of momentum is linked to weaker inflows of new work, with the surveys providing some evidence that demand is being dented in part by higher prices."

Looking at the charts, this could be an interesting spot to pick at some retail longs.

For now, however, I am staying away from the sector.

I am taking my profit in ProShares UltraShort Lehman 20+ Year Treasury Bond ETF (TBT) above $39 now.

I'm staying short (investment) iShares 20+ Year Treasury Bond ETF (TLT) .

Goldman Sachs comments on the ADP jobs report:

1. Private employment rose by 263k in March according to the ADP employment report, well above consensus expectations for an increase of 185k, but the 78k positive surprise was accompanied by a 53k downward revision to February job growth. By sector, service-providing employment rose 181k, led by healthy increases in professional & business services (+57k), leisure and hospitality (+55k), and healthcare (+46k) payrolls. However, education employment showed a surprising decline of 32k, matching the record drop it recorded in November 2004. Employment in goods-providing sectors also increased (+82k), led by growth in the construction (+49k) and manufacturing (+30k) sectors.
2. Some of the March strength may reflect the lagged impact of accelerating nonfarm payroll growth, as well as the other financial and economic inputs to the ADP model. These factors may be partially masking the impact of Winter Storm Stella, which we expect to manifest more visibly in March's nonfarm payroll growth. This being said, we've found that large surprises in the ADP report tend to be predictive of the subsequent nonfarm payroll surprise. Even after taking into account the negative revisions, today's report likely implies at least some upside risk to Friday's employment numbers. More generally, we believe today's report provides additional evidence of the underlying health of the labor market.

DoubleLine's Jeff Gundlach had his regularly scheduled webcast yesterday.

Here is a brief summary. (Hat tip Zero Hedge)

His presentation was comprehensive and worth listening to if you can block out some time.

Let's go to the tape!

There is another Apple (AAPL) story regarding possible delays in the introduction of the next iteration of the iPhone from September to October/November:

"Technical issues related to the lamination process of curved OLED panels, and the adoption of a 3D sensing system may cause the delay of the new iPhone devices..."

Digitimes is the source. 

This news and uncertainty could weaken Apple's shares today.

It also could be a good thing for my Trade of the Week of buying ProShares UltraPro Short QQQ ETF (SQQQ) and shorting PowerShares QQQ Trust (QQQ) .

Yesterday I tried to make the case to sell/short bonds.

This morning's data is supportive of my view, as noted by Peter Boockvar below.

My pal Peter Boockvar, chief market analyst with The Lindsey Group, discusses bonds, sentiment and some data: 

At the end of last summer I expressed my belief that the bond bull market was over for a variety of economic and non economic/central bank reasons after the spike in prices, plunge in yields after the UK referendum. I still believe those yields will not be seen again in our lifetime. I wish the analysis was simply looking at the growth and inflation outlook but my concern at least right now has more to do with the non economic reduction in easing from the Fed, ECB, BoJ (unspoken and subtle) and maybe the BoE this year. In the US, I believe the 10 yr yield range will remain in the 2.30-2.60% range for now until proven otherwise but don't expect it to break below for any noticeable time. The $64k question that will build as the year progresses is what will the curve do when tapering of reinvestments actually begin. When the Fed starts buying less, they will join foreigners who are outright sellers. Will the curve flatten because growth will be threatened or will it steepen because we're taking a big buyer out of the market? The German 10 yr yield back at .25% is ripe for shorting again with the ECB trimming its QE. Quietly, the Japanese 40 yr JGB yield closed at the highest level since February 2016 overnight at 1.088%. I keep highlighting that maturity because it's the furthest from the yield curve control experiment that goes out 10 yrs.

See below the comments on inflation in Europe and Japan and the same can be said for the US. Yes, the influence of energy prices will start to reverse (the y/o/y change will go to zero this June) and capping the rise in the headline stats but looking at all industrial commodity prices has them still near the highest level since December 2014. The Journal of Commerce index of industrial materials is up 25% y/o/y and by June will still be up 20% y/o/y. This comes on top of services inflation that remains pretty steady.

After falling to the lowest level since November 9th at 49.5, II said Bulls rebounded by 6.3 pts to 55.8 and is right back to ebullient. It was on March 1st that it touched 63.1, a 30 yr high and that also coincided with the closing top for now in the SPX. About all of the rise in bulls came from those expecting a correction. Bears were up by .2 pts to 18.3. Bottom line, outside of AMZN, AAPL, TSLA, NFLX and FB, the rest of the market continues to churn and that churn started late February when the sentiment figures got overly bullish. Highlighting the divergences in the NASDAQ in particular, yesterday saw more 52 week lows than highs and the cumulative advance/decline line in the NASDAQ topped on February 21st.

With mortgage rates little changed w/o/w, mortgage applications to buy a home was basically flat with a .7% rise but that is still up 7.5% y/o/y as we get to the heart of the spring selling season. Refi's on the other hand fell for a 3rd straight week and are down by 4.2% w/o/w and 33% y/o/y. Refi's essentially sit just above the lowest level since 2000. Can there be anyone left who hasn't refi'ed. People, if you haven't already, wtf are you waiting for?

Ahead of the US services index today, Markit reported its March final read of its services index for the Eurozone which was 56 vs the initial print of 56.5 and the estimate of 56.5. It still though is near a 6 yr high as is the composite index which also includes manufacturing. The gains were led by Germany and France while we saw dips in Italy, Spain and Ireland. Employment was a particular bright spot at the best level in more than 9 ½ years. This is what they said about inflation: "Price pressures remained strong in March. Input cost inflation was close to February's 69 month record, reflecting rising global commodity prices and the historically weak euro exchange rate. The pass thru of higher costs to clients, combined with improving pricing power, meant output charges rose to the greatest extent since June 2011." Markit believes the eurozone grew by 2.4% annualized in Q1. I continue to like the euro vs the dollar and some European bourses. The euro is flat today as are most sovereign yields with a mixed performance in stocks. European banks are up almost 1% after a 3% drop over the two prior days.

In the UK, its services PMI rose almost 2 pts to 55, above the estimate of 53.4 and that's a rebound after 2 months of declines off the 56.2 level seen in December. New orders rose but job growth slowed and we saw "average prices charged by service sector companies increased at the fastest rate for 8 ½ years in March. This was overwhelmingly linked to higher input costs during recent months. Survey respondents also noted that resilient demand had provided scope to pass on some of their increased costs to clients." Markit estimates the UK economy grew by 1.6% in Q1 annualized and they see particular weakness on the consumer side because of falling real wages. The pound is higher on the number beat and the 10 yr gilt yield is up a hair. The UK 5 yr gilt inflation breakeven rate is higher by 2.5 bps to 3.25%, the highest since early February. Compare that for a moment to the .25% benchmark BoE rate that they think is prudent on top of max QE.

After a mixed Tankan report seen Monday and a drop in its Markit manufacturing index, the Markit services index for Japan rose to the best level since August 2015. Employment grew for a 3rd month and backlogs hit a 20 month high. With respect to prices, "the latest survey indicated that average operating costs continued to rise in March, led higher by increased prices for fuel and labor. Input prices have now been rising continuously for close to 4 ½ years, although the latest rate of inflation was a 5 month low." Output prices for services companies though rose at the quickest pace since October 2015 while manufacturing output prices were little changed m/o/m. As mentioned above, super long term yields in Japan are at the highest level in 14 months. As for the Japanese economy overall, the missing piece to quicker growth remains the consumer and higher inflation is not going to help them. The Nikkei was higher by .3% overnight with the yen hovering around its highest level since November.

And Peter analyzes this morning's data: 

ADP said 263k private sector jobs were added in March. That was well above the estimate of 185k but the offset was a 53k downward revision to February to 245k and a 12k person downward revision to January to 249k. Thus, the combined upside was 13k jobs, so close to in line with expectations for the first 3 months of the year. Small businesses led the pace of hiring and if there is a segment of the private sector that will benefit from less regulation, a hoped for overhaul of the ACA and lower taxes it is this. We saw another big gain in construction jobs as they grew by 49k after the spike of 58k in February and 49k in January, all helped by the mild winter. Manufacturing was a bright spot with a job gain of 30k. As for service providers, they created a net 181k jobs vs 145k in February and 187k in January. It has solely been manufacturing and construction that has driven the year to date job gains relative to expectations.

Bottom line, while markets are responding to the headline print, as stated the figures were about as expected when the revisions are included. That said, the pace of job this growth this year has quickened to an average of 252k vs 181k last year. Construction and manufacturing has been the main driver of that with the former being boosted by weather as 156k construction jobs were added in the January thru March time frame compared with 86k in the same time period last year. The question now for manufacturing is what happens with auto sector hiring. I've seen stats that 4-5% of all jobs (services included) touch the auto sector in some fashion, many directly and others indirectly. Service sector hiring is no different this year than last year. For the 3 months this year they have averaged job gains of 171k vs 174k in 2016.

The estimate for private sector job gains from the BLS is 170k vs 227k in February.

"North Korea launched yet another intermediate-range ballistic missile. The United States has spoken enough about North Korea. We have no further comment."

--Rex Tillerson, Secretary of State 

This morning The Quinnipiac Poll indicates that President Trump's approval rating has dropped to 35%; that's worse than almost every prior presidential approval rating and rivals President Bush's low print when we were moving into The Great Recession. (Other polls have had similar outcomes -- for example, The IBD/TIPP poll on Monday.)

The absence of any legislative victories to date coupled with the poll results make it difficult for the president to enact policy and difficult for his own constituency, Republican congressional members, to support the president. We already have seen the schism and gridlock in the health care vote, in which the Freedom Caucus failed to support the administration's efforts.

Putting the Hand on a Hot Stove

Strangely, for the second consecutive day, Vice President Pence continues to try to orchestrate another attempt to resurrect a health care proposal with disparate factions in the House. This action is bewildering after the political capital that was lost in the initial health care vote. Most agree that the president should move on to tax, regulatory and infrastructure policy now.

Further deterioration in support for the president in our country also will create a challenge for the administration in foreign policy, as it reduces the willingness of non-U.S. powers to cooperate with us in a fragile and interconnected world.

I continue to see a pushback of the new administration's tax, regulatory and infrastructure initiatives, the presumed success of which has guided our equity markets higher since early November.

As mentioned in my opening missive on bonds yesterday, the fixed-income markets, where the 10-year U.S. note yields 2.36%, have delivered a thumbs down to the "hockey stick" progression in economic and profit growth that the bulls expect. 

Though yesterday was another day of rallying from the weakness in the morning, the market's character seems to be changing. Breadth is deteriorating as are the number of new highs. (See Rev Shark's opener this morning.) 

Over There

Meanwhile, Syria, where that country's air force is supported by Russian planes and is dropping toxic material on civilians, and North Korea, with its expanding military arsenal, pose ever-present issues and threats that must addressed under the Trump watch. Thus far, instead of issuing foreign policy directives and leading us in potential crises by taking strong and aggressive action, the president has criticized his predecessor. I recognize that there is no perfect answer, that there is complexity to the responses of the U.S. and world community to acts of aggression. However, this is an opportunity, if the president elects, to do things differently. But pointing a finger via tweets at former President Obama, whose Syrian policy was ineffective, doesn't cut the mustard with many.

Stated simply, it is now President Trump's watch. Solutions, as complex as they might be, must be delivered now.

The Answers to My Seven Questions Remain of Concern

For the last year or more I have been preoccupied and concerned with the answers to three simple questions:

• In a paperless and cloudy world, are investors and citizens as safe as the markets assume we are?
• In a flat, networked and interconnected world, is it even possible for America to be an "oasis of prosperity" and a driver or engine of global economic growth?
• With the G-8's geopolitical coordination at an all-time low, how slow and inept will the reaction be if the wheels do come off?

Recently I added four additional questions to the three above, the answers to which concern me as an investor:

• Remember when the big argument in favor of President Trump was that he was a dealmaker who knew how to get things done? That was when he was doing real estate deals. Now he has to deal with 535 other politically partisan legislators in Congress on their own real estate turf.
• Does the administration have the depth of experience, understand the extent of the legwork and organization required for passing legislation or have a coherent idea or shared vision of what it wants to achieve and what problems it means to solve?
• If President Trump can't easily put through a health-care package, what does that mean for more difficult regulatory reforms and his tax- and fiscal-policy agenda?
• President Trump took credit for the stock market's advance since his election victory. Will he take responsibility for Tuesday's correction, and possibly a further correction? Is it a slippery slope for an administration to use the S&P 500 as a barometer of success? And is a pro-business and anti-domestic programs (in education, the arts, etc.) agenda going to benefit those in the lower and middle class (largely his base) who have suffered the most over the last decade?

Bottom Line

Instead of attacking the intelligence community, alienating and attacking President Obama, warring with the press, fighting with Republicans on the Hill who refuse to give the president everything he wants and condemning the Democratic opposition --generally staying at war with everyone -- it is time in line with his promises during his campaign for Mr. Trump to change things, shake things up and make lives better for Americans.

Does anyone believe, given the above, that President Trump can get the Chinese to stop North Korea's military expansion?

To me, the current tests in North Korea and around the globe will continue.

It is hard for many to yet see clear domestic and foreign policies from the White House -- no overriding doctrine, strategy and framework are emerging to guide us forward.

And, to many, daily White House photo ops don't pass the test.

Governing is not as easy as we see on television. The president needs to develop the personal discipline and team to more appropriately understand the complexity and challenges of the issues our country faces.

If not, the markets will grow impatient -- post-haste!

***

As an aside, tomorrow night I will be having dinner at Mar-a-Lago. I will attempt to send pictures on Friday morning!

P.S. A continued qualifier: My column is not intended as a political statement. It is my view of the administration and my judgment on the president's ability to move forward on legislation and how this will impact our markets.

Regrets are the subject money of Jim "El Capitan" Cramer in a stimulating and thoughtful segment on "Mad Money" last night. 

This segment explains why discipline and patience will help you in the long run and why you shouldn't be blinded in the next decision. It is the sort of historical perspective and understanding of the psychology of investing that provides such a valuable lesson by Jim in order for all of us to better deliver superior investment returns.

This short and nuanced six-minute segment is worth its weight in gold and is another example how Jim is so valuable to the investor, be he/she a home gamer or an investment professional.