The American Health Care Act, or “Trumpcare,” as some call it, died in the House of Representatives. With the Democrats unified against the bill, and enough dissenters within the ranks of the Republican Party to block its passage, Speak of the House Paul Ryan decided to cancel the vote. While the president and Republicans haven’t given up and could muster another attempt to replace Obamacare, the failure of AHCA proves that passing controversial legislation won’t be a cakewalk even if Republicans control the White House and both the Senate and the House of Representatives.

From an investment perspective, we question the wisdom of spending political capital on a complicated issue such as health care as the first major legislative effort under President Trump. However, if the failure of the AHCA doesn’t prevent the president and Congress from enacting legislation to invest in infrastructure—the quickest route in our view to boost productivity, one of the key drags on the U.S. economy in recent years—then the failure of AHCA doesn’t matter in the long run. On the other hand, if the AHCA debacle negatively impacts Trump’s economic agenda, then it will likely go down in history as a key mistake.

Trump and Congress will next have to tackle budgetary issues. Passing a stopgap budget and either raising or re-suspending the debt ceiling are on the agenda, and Democratic support is needed. Unusually, the president has asked Congress to add $33 billion in new defense and border spending to the near-term spending bill intended to keep Congress open past the April 28 funding deadline. To help offset the $33 billion, Trump proposes $18 billion in cuts to domestic programs such as the National Institutes of Health. His proposal has drawn opposition from Democrats and some Republicans and it’s currently unclear whether it would be included in the stopgap budget draft.

Yesterday morning we closed out the VanEck Vectors Gold Miners ETF (GDX) June 22 call option, after our gold stock indicator began to become less bullish. Today, that indicator has fallen into neutral territory. This trade was a successful one for us, as the GDX June 22 call gained 25.7 percent for us in 15 calendar days.  

Our stock indicator is still in slightly bearish territory last week. The open option trades against the market via the SPDR S&P 500 ETF (SPY) June 220 put and SPY June 235 put are still holds.

Should the stock indicator move into neutral territory, we expect to keep the June 220 SPY put open, and will roll over into a longer-dated put if necessary, as an ongoing hedge against the market, whose underlying tone continues to not look good.

We will likely close out the SPY June 235 put if mandated by the stock indicator.  

Our current indicator readings are listed in the table below. With the exception of the stock indicator, everything now flashes neutral signals.

Besides the options, we currently hold open (long) positions in the following stocks: NovaGold (NG), Gabriel Resources (GBRRF), Schlumberger (SLB) and Trilogy Metals (TMQ).