TVO Market Barometer 11-7: Is it really all about the tax plan?

On Tuesday the S&P 500 took another shot at all-time highs then sank to end at a modest loss for the session. Just about any red day we get nowadays brings out the gloom and doom crowd, eager to blame any sell off on the chance that tax reform may not pass. What if it’s not really priced in yet? Maybe by the time the “all about the tax plan” folks figure out what’s really going on (uh, corporate earnings, anyone?), the market may very well be on the way to bigger and better things with or without tax reform.

According to volume and internals, our indicators are right down the middle (Both TVO and IO are at zero), so in the mid to long-term, big institutions are not yet firmly seated on any side of the fence at this point (and a potential signed bill is more than a month away). So will the rally take us even higher if it passes? We’ll just have to wait and see. -MD

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