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The main narrative for the tumbling of stocks Tuesday goes like this...
If the Trump team can't get a victory on the repeal of Obamacare on Thursday, then the odds of success on also getting lower taxes and higher infrastructure spending are greatly diminished.
There is some logic to the statement. However, it is a bit simplistic. Perhaps a tweak here or there is all that is needed to get a new healthcare plan approved. And many speculate that healthcare is actually more contentious than taxes and infrastructure. So a stumble here does not preclude success on these other fronts.
Unfortunately because this narrative is now so widely held amongst investors, then a failure of the healthcare vote on Thursday could provide another downdraft for stocks. The length and depth of which will be determined by how far apart Washington seems from getting it passed in the near future.
Active traders may want to consider getting a touch more defensive on such news. Patient long term investors can just ride it out knowing the bull market is still in place. Plus they can buy more of their favorite stocks on the dip.
Finally, both traders and long term investors can benefit from the wisdom shared in this latest commentary by Kevin Matras:
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One should primarily look for stocks that have recently been witnessing price increase. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward. Read More »
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