Muddlegate might be a decent description about the multitude of real wild confluences that, 'in theory', could impact markets; but so far tend to continue to be absorbed, with the market stable relative to the world, or at least so it seems, with every sell-off reversed soon thereafter.

That's a reason we viewed shorting as so treacherous in this market; and it still is, especially with the Chinese trade delegation returning to the U.S. (as far as is known) within days. It was affirmed late today.

I am returning from a routine eye exam; and with dilated eyes it's not too easy typing this report. Perhaps the foggy view tonight is similar to the market's responses to the controversial events of the day. Our view has been pretty clear-sighted for awhile; don't fight this market too hard and while risky, don't press it on the downside, at least not yet. 

As to politics mostly this should be tuned-out of focus, until it matters. It is not impossible that it will matter; especially if more Republicans shift to the view that this President did disparage the Office and his staff yet again with today's rant that was recorded covertly by a reporter (that's the 'what we used to do to spies' remark, which elicited mild laughter).  

I realize he's not a lawyer and not a politician as the market is focused on China trade for now; but we have to keep in the back of our minds a perspective of what happens if the political pendulum shifts radically. I am optimistic that it won't; and now even a number of Democrats have said they'd not support Warren if she's the nominee (that's surprising).

But again this is not the heart of this stock market; even if it's the soul of community discussions and thoughts at the moment. The 'heart' will be the sluggish earnings and guidance forthcoming (the latter might be tempered a bit better 'if' a China deal happens extraordinarily quickly in advance of most multinationals reporting results for the past Quarter). The heart may also be whether or not the huge sequential injections of capital diminish as they're supposed to, once we get into October as in fact the Fed Chairman has personally stated would be the case.  

In sum: my view for several weeks (one reason I thought S&P would change just minimally while I was in Europe) was that so many were bearish due to the political (and Iran-war risk scene) that shorts would get run-in every time they took the market down.  

This will not always be the case; but with China coming next week, a relief rally (or holding action) was the expectation as this chops along a high level zone with sort of an indecision about the bigger picture.  

I discussed this week ideas as to 'when' or why the market will actually shake-out in the nearer-term; but why it won't be catastrophic either. It would 'either' relate to a Banking liquidity crisis if the injections persist in the 4th Quarter, or possibly a relief rally on a China Deal that's really surprisingly substantive; and then interest rates start to firm as serious business plans can have a better foundation upon which to be laid.

However there are two mechanisms by which it could still be far dicier down the line. One would be 'war' with Iran; and the other could still be 'if' a broader cross-section (especially of the Senate) does not 'circle all the wagons' as they describe it, on behalf of Trump. The idea (aside of course the man) isn't about Trump, but a change of the reform and tax trend in Washington. Again it doesn't matter whether we're opposed to tax hikes and wealth redistribution efforts, or not. It matters that market sentiment does care, and is absolutely frightened of some prospects.

So it's best if economics do not shift to yet-another direction; but this is actually getting close to when it gets interesting; even though much of that area will remain murky for some time. Of course not so much for small cap or under-performing little stocks; as is normally the case this time of year even under the best of circumstances.