Thoughtless Thursday – TrumpDon’tCare Health Plan Gets A Vote

Big vote tonight.

If the TrumpDon'tCare Plan is approved (the CBO says it can no longer be called a health plan since the overall goal is to kill as many people as possible), then Trump's agenda is winning and the markets could leg higher. If, on the other hand, the GOP revolts against The Donald, all Hell could break loose so ignore the politics if you want to but we're paying very close attention! 

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Interestingly, the main GOP objection to TrumpDon'tCare is that it still cared about forcing Health Insurance Companies to provide minimum benefits to their customers. That has now been removed by the White House and now the Insurance Companies don't have to do anything for anyone at any time – isn't that great?  As noted by Politico, however:

While altering the coverage requirements could help win over the Freedom Caucus members, it could drive away moderates — another coalition that House leaders need to build upon in the final 24 hours before the planned vote on Thursday. House leaders are still short of the 215 votes they need.

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It's going to be hard to bridge the gap because the bill still is not Draconian enough for the "Freedom Caucus":

Freedom Caucus members, led by Meadows, want at least some parts of Title One of the bill removed. Included in Title One are many of the Affordable Care Act's benefits, like a prohibition on insurers denying coverage over pre-existing conditions and a prohibition on lifetime and annual limits.

That's right, your pre-existing conditions can now stop you from getting coverage and, even if you are covered, there can be a cap – so don't get too sick or you'll be on your own! Aside from leading to a great unwinding in the Health Care, Pharma and Biotech sectors, TrumpDon'tCare will put a huge burden on the bottom 99% and eat into their disposable income so prepare for yet another downgrade to our GDP forecasts if the bill passes.

We're already pretty short, of course. Our Short-Term Portfolio has rallied back on this week's small dip and we are now up $16,000 from our Jan 22nd review after hedging much more aggressively last week. We added the Tesla (TSLA) short and Amazon (AMZN) short that we discussed on Monday, which tilted us more to the bearish side with great timing. Of course, we also added some well-hedged long positions as well – just in case…

Janet Yellen will be speaking at 8am this morning so let's watch the Futures. Hopefully she'll pop us higher (so we can short again) and then super-dove, Neal Kashkari speaks this evening along with Kaplan and tomorrow morning we have more doveish chatter from Evans and THEN Bullard – one of the Fed's last remaining hawks – will speak at 8am followed by Williams at 8:30. Our shorting lines are the same as they were on Friday, when I said in the Morning PSW Report:

Our target range for the Dollar is 100 to 103 so we expect to be back at 101.50 soon and THEN we will have a better idea of what the real reaction to the Fed was.  So far, as we predicted (and you are welcome if you took yesterday's index shorts for huge wins), the post-Fed rally has pulled back a bit but the Russell (/TF) still makes a good short at 1,385, especially if the Dow (/YM) is below 20,900 and the S&P (/ES) is below 2,380 and the Nasdaq (/NQ) is below 5,420 AND the Dollar is over 100.  

Today is option expiration day and quarterly expirations can be very tricky so a good day to take off and come back Tuesday (Mondays are pointless) to see what's up.  By the way, if you don't feel comfortable walking away from the markets for a few days – you REALLY need our help because a good portfolio should run itself – not run you!  

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