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3 reasons the market could sell off after Trump is sworn in

Donald Trump/Associated Press

There is a saying on Wall Street called “buy the rumor, sell the news.” It refers to when the market (or a stock) runs up in anticipation of an event, only to sell off when the actual event occurs. Examples include product announcements, analysts meetings, economic reports, shareholder meetings and especially earnings reports. I wouldn’t be surprised to see a “sell the news” event after the Presidential Inauguration for the following reasons:

1) Sentiment — In April 2016, when the Dow was 17,500, I made a call for Dow 20,000 mainly because sentiment was extremely negative. I ended up being right on this call (actually missed it by 13 points) and was very pleased with my significant out-performance. Since the election, however, sentiment has completely turned around. The majority of sentiment surveys are showing extreme bullishness and money managers are more...


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