Hold Up Your Badge, So They'll Know You're a Policeman

It seems like a lifetime ago, but you may recall that upon Trump's recent election in November 2024 the private prison stocks (CXW, below on the weekly chart, and GEO) both sprinted higher as a knee-jerk reaction. The rationale behind the moves centered around the perception of Trump campaigning on tough law and order alongside strict immigration policies. 

After those initial super-spikes, both CXW and GEO have drifted off to sleep, essentially meandering sideways for nearly sixteen months. That said, as you can see with CXW the sideways channel may very well be setting up another breakout higher.

Although Trump has certain comforts of being a second-term President, it is only natural he is concerned about impeachment. With midterm elections coming up this November, human nature and game theory suggests he wants his own party to retain as much power as possible. 

Thus, even with the controversy surrounding Iran so far, alongside sticky inflation and frozen labor and housing markets, one could easily envision Trump taking aggressive action this summer for that which he has control--Being a "law and order" President, if for no other reason than to try to galvanize what is now a split GOP base. 

Under that theory, the private prisons would begin to fill up, and CXW GEO could follow-through on the November 2024 election night promise. As a result I am keeping an eye on CXW GEO this spring, looking especially for CXW (the better chart, for now) to breach the $22 area upside. 

Elsewhere, even with another hopeful bounce in stocks we still have oil firm today. Tomorrow appears to be a hard deadline for Trump and Iran (but he does have a long history of deadline extensions) and, frankly, stocks are unperturbed. Either they have this completely correct, that peace is coming, or we have a pre-COVID crash delayed reaction on our hands.