Its all about China trade this morning. And right now the markets do not like what they see.
An hour before the opening, The dow is off almost 500 pts and the Nasdaq off about 150.
On the bright side, TLT is unchanged and Oil almost unchanged. This to me indicates that at least a partial gap fill might be a reasonable trade this morning.
The news out this weekend was the President plans to increase tariffs on China, as negotiations are not going as well as he wants. Then the rumors started flying, the biggest was China was going to cancel the trade meetings at the end of this week.
Early this morning, news came out that the talks are still on. So there is a lot of uncertainty, but as always the market overreacts.
With the news that the meeting are still on, I would expect the markets to rally further off the overnight bottoms. How far remains to be seen.
To me this is a buyable dip. Until we signs of a recession in the works, I am going to stick to a bullish short term view. I am not as bullish medium term , and long term, it all depends on 2020. Trump loses and I become a full bear on the markets.
On the geo political front things are heating up again. The mid east is ablaze with fighting breaking out between Israel and Gaza. This has reached levels not seen in a long time. Combine that with Venezuela and a lot could go wrong.
On the home front, a showdown is looming in the House, where they are demanding not only a full un-redacted Mueller report and also looking to get Barr to testify under rules that have never been in place in US history.
So far there seems no indication for compromise by either side. Should be fireworks this week on that issue. In addition, Barr has started a full scale investigation into the predicate for the spying on the Trump Team.
I suspect, that the end result will be that there was no predicate, but it was all manufactured, to weaponize the intelligence committees for political purposes. Now I know this is a controversial topic, however, I have been following this closely, and if I were a gambler, that is the way I would be betting.
What that means for investing purposes is more volatility. As if that is true , a lot of peoples lives are on the line. One of the best independent investigative journalists to follow on this is John Solomon. If your only watching the mainstream media, you will have no idea what reality is.
There is much more of course, but as the purpose of this site is handicapping sports and investing, I do not dig deep into the political issues, only as to how they may affect the markets.
I have several trades on heading into today, and will be taking a hit on those, at least on the open. Typically on big down opens I do not take a knee jerk sell action. I wait a bit for things to settle down and then plan my strategy.
As a part of my sports handicapping subscription I sent out almost all of my trades via Viber. This has been a nice valued added feature of the handicapping service. At $49.00 a month for all sports plays I handicap, you get most of my stock trades.
I have been only as a sports handicapper for almost 15 years now and get almost all my business from long-time subscribers and word of mouth. Few handicappers can positive EV over that period of time. But, I teach how to handle variance to deal with these.
As an update: We are no close to 30 min before the open and TLT is +1/2%. This would change my opinion on a partial gap fill trade. I would not consider any gap fill trades today.
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:) In addition, I share all my short term swing trades to subscribers.
Good Luck Today
RickJ’s Handicapping Picks