Folks, it’s very important that you understand what’s going on in markets right now so that you are not blindsided in the event of a market crash.

Sell In May and Go Away is upon us. We have been seeing April selling ahead of May, already taking place. But something different is going on this year which is extremely dangerous. It’s the perfect storm brewing that has the potential to crash markets during this year’s weakest 6 months of the year.

At the same time we are entering the seasonally weakest 6 months of the year which goes from May through the end of October, 10-year Treasury notes hit the 3-percent mark for the first time since 2014. Not only do Treasury yields impact rates on the $26 trillion of outstanding US corporate, municipal and mortgage debt, but as rates rise and the cost of borrowing increases, corporations are expected to slow down stock buybacks.

Think of stock buybacks as a company’s discretionary income, sort of like how a consumer has discretionary income. When the cost of borrowing increases, if a company wants to maintain the level of share buybacks that it’s been doing for years now, it will have to increase the cost of its products, or reduce its share buybacks. I don’t think companies will opt to pass on increased costs of servicing their debts onto consumers. We saw what happened when Apple and Samsung tried to push out $1,000 smartphones. I suspect arrogant Bezos and Amazon will learn a similar lesson as they raise the cost of Amazon Prime memberships to $119 per year. Companies will have less discretionary income as the cost of servicing their debts rise, which will result in a slowdown of stock buybacks. Right now, the mainstream financial media is running lots of stories about how the Trump tax cuts will fuel an increasing level of share buybacks so I may be a bit ahead of the ball on this prediction. However, it was the mainstream financial media that told us bank stocks were going to rally as a result of interest rate hikes. It was also the mainstream financial media that said this earnings season was the first to include the Trump tax cuts and so earnings would explode higher and so would stocks. So far, this earnings season has been a dud in terms of the stock market rallying on earnings and revenue beats. My point is that just because the financial media is saying that the Trump tax cuts will fuel a continuation of companies doing record levels of share buybacks, it doesn’t mean that it’s true or that things are going to actually work out that way. In my head, increased borrowing costs mean less share buybacks because more money is going to interest payments on corporate debt.

Corporations have bought back $5.1 trillion of their stocks over the past 10 years and the low Fed Funds Rate, which made this possible, is now rising at a fast clip.

Japan recently expressed concern about rising rates. Japan’s central bank is combating rising rates by holding short-term rates at -0.1 percent, and the 10-year rate at zero percent.

The EU central bank also expressed concerns over rising rates. Mario Draghi vowed to continue its €30 billion a month bond buyback policy, and keep interest rates in negative territory until 2019.

These actions from our largest trading partners have the effect of pushing up the U.S. dollar relative to the yen and euro. This is why we have been losing in the global currency wars for the last several weeks.

At the same time that interest rates are rising, as we enter the trading period known as the weakest 6 months of the year, we have geopolitical risks of the kind we haven’t seen in more than 20 years.

For example, you may not know that Russia is striking back against U.S. forces in Syria.

US Special Operations Command General Tony Thomas said he did not have proof that it was the Russians who were jamming our assets in Syria but who else has that kind of technology? Our forces were supposed to be immune to electronic jamming technology and yet someone in the Syrian theater has this technology. Russia is the most technologically advanced actor in that theater and so it makes sense that Russia would be behind it. Russia’s official statement is that it has other things to do in Syria than tamper with US gunships. Of course Russia is lying. Russia strikes back against an enemy with superior forces by covert actions. Covert actions are a basic tactic in the book of warfare. So much for U.S. spies inside of Russia getting intelligence on their electronic jamming technology. My point here folks is that Syria is far from over.

Meanwhile, the Syrian strike has weakened Trump’s support base and made it more likely that Democrats will win seats back in Congress. I personally stopped supporting Trump after he decided to strike Syria, not once, but twice over the last year. It’s such an evil, diabolical plan that anyone with a half-decent IQ can see right through. Trump abandoned his America First agenda and is doing the opposite of what he promised people that he would do. The betrayal of his support base is so absolute that even some of his biggest supporters were brought to tears.

Folks, the Trump love-fest, the Trump rally is over.

Listen and listen good. I’m telling you what is. I have no political agenda and I do not support Republicans, Democrats, Libertarians, or any other political party. These jerks try and put us into these categories, these boxes, and then pressure us within these categories to conform with the beliefs of that group. I don’t play that game anymore. My point here is to explain to you what is happening at a deeper level than you get in the mainstream financial media, behind the scenes if you will, because all this plays out in the direction of the stock market eventually. The goal is to have total situational awareness. The goal is to have our eyes wide open so that we are not blindsided by a big directional move in the stock market.

The Trump rally is over. If Trump would have stuck with his campaign promises, he would have gotten us out of Syria, made friends with Russia, cut the budget deficit, lower taxes for working Americans to where a couple making under $60,000 a year won’t pay any taxes and can write the IRS a letter that says I win, and re-focused spending on improving the economy here at home. Instead, he’s gotten us deeper entwined in Syria, made enemies with Russia, primarily cut taxes of corporations and the rich while only giving a small tax cut to working Americans, increased the budget deficit at a pace faster than even Obama in his first term, and spent the lion-share of the budget on military spending.

The next likely betrayal will happen regarding China, as Trump backs away from trying to reduce the trade balance with China. It hasn’t happened yet but with the trend of Trump breaking campaign promises, it should not surprise any of us when it happens.

Another hot-spot in the Middle East is Yemen. Saudi Arabia is striking Yemen with the support of Israel and the United States. Iran is backing Yemen. Russia is backing Yemen. China is backing Yemen.

High-stakes, chess-like maneuvers are taking place within the U.N. and have been for years. For example, at the end of 2017, China pushed for an international inquiry into atrocities in Yemen, as demanded by the U.N. High Commissioner for Human Rights, but Saudi Arabia and the United States said they did not support the idea on the grounds that now was not the right time with all the fighting going on.

Oil prices have hit a three-year high over fears distribution could be disrupted after Yemen’s Houthis fired two ballistic missiles at a Saudi Aramco facility. Should oil prices break above $100 a barrel over the next few months, it would tank the stock market.

Do most people in Saudi Arabia really support the Yemen war? Probably not. At the end of 2017, the Saudi Arabia crown prince arrested, tortured, and murdered princes, ministers, office holders, businessmen and prominent public figures. The mainstream financial media reported that the move was to “fight corruption” inside the Saudi government. But in reality, anyone who opposed the prince, including those who opposed his actions in Yemen, were rounded up and killed. It was a classic political power play to secure his leadership and eliminate potential opposition.

Was President Trump informed by Saudi Arabia about the purge? You bet. Saudi Arabia and the U.S. have a long history of funding and supporting Al Qaeda and other Islamic fundamentalist groups that overthrew Moammar Gadhafi in Libya, and then launched the failed attempt to replace president Bashar al-Assad in Syria. President Trump was supposed to get the U.S. out of the Middle East and focus on improving life for U.S. citizens. It’s clear now that the President is not going to do that. Again, this is not about politics. I’m indifferent to President Trump now. Remember, let’s keep our eyes wide-open as traders so that we are not blindsided by a possible Saudi Arabia civil war. Keep in mind that the 911 attack was carried out by Saudi Arabia citizens. If President Trump is now viewed as helping the Saudi Crown Prince Mohammed bin Salman murder all his political opposition, the U.S. could be attacked again by covert groups operating inside of Saudi Arabia.

Keep your eyes on the price of oil and what is happening in Saudi Arabia and Yemen.

With the weakest 6 months of the year upon us, the perfect storm is brewing that has the potential to crash markets.