Sink or swim on tax reform is essentially how President Trump put it, in a speech late Wednesday afternoon. His point was that the economy could not really 'take off' without the cuts (and capital repatriation), and while that's not really doubtful, it does contradict those who believe it already is flying.

In these quarters, we've felt the economy is growing slowly and languishing a bit in most areas, with a post-storm (and -fire) reconstruction boom actually pending. The assumptions about the need for tax reform are correct; and of course there is my slightly cynical view that the Fed needs to hike rates just a bit almost regardless of whether it's justified; and because they don't want the economy to become heated actually. Then they'll have a basis later-on to cut rates if the economy retreats into recession. However that could fail in a way; because of the likely construction boom following the horrendous as well as life-threatening fires that continue to burn uncontrolled in California.

As to Trump, his comment means the President is contradicting himself a bit (as he has often spoken about the economy soaring before any tax relief of course); when in reality the market move has been optimism and confidence based on the regulatory relief and hoped-for tax reform, as I've contended. So yes it matters, and he's essentially right; because the market's priced-in most of it already; therefore failing to enact a tax bill would really throttle this move; no matter what the permabulls want to say about that prospect.

Meanwhile, of course it's often seen that a market holding this far into Fall is unlikely to break; but we still remain on guard for correction; not catastrophe unless of course a huge exogenous event were to occur (as the meetings in the Situation Room over Iran and North Korea remind us isn't totally foreign to market concerns).

Bottom line: To us this is still an exhaustion phase, meriting caution.

Daily action observes the continued complacency; the speculation that a big hedge fund or two are leveraged 'games' (I won't say the word 'Ponzi'); a story worth mentioning because any 'crack' in the larger sector would have wide ramifications. Regardless this is a market begging for correction and of course that's whether it gets it or not.

Welcome to the Greater Fool Game of this generation; because that's what it is. I would never say that an Intel (INTC), or an Nvidia (NVDA) or any stock could not go higher; but I can and do say that investing in them at these levels with fresh cash is ludicrous, even if they subsequently advance further. It's that basic.

Meanwhile markets presume supreme bank earnings; while I'm not so sure many of them had the revenue streams generally assumed. And I also don't dismiss the 'sell the news' approach; which could mean such stocks could go up briefly and then down if they report good numbers; and drop, bounce, and go lower if they miss numbers. That's what can happen when sectors or markets are already extended.

Thursday might be a dip-up-down market; but nothing has gained traction on the downside yet. It's time to be prepared for that while others resort to a simply dismissal of every day as 'yet another new high'. A rainy day is due.