A new week and a gap up, although a small gap at that. Of note, Crude is strong, TLT is strong , Gold is strong and finally Vix.x is strong.
A mixed bag for predictive purposes. Overall I would not expect much of a rally today.
On the news front, We have the G20. The news to watch is Trump’s meeting with Xi. My prediction is no deal, and the markets take a tumble this week. Reliability, lets say 55/45.
Then we have the White House putting a hold on the illegal roundup they had planned for Sunday , giving the House a chance to make a deal. Chances of a deal, 10% , and that is being generous. Reliability, lets say 80/20.
Another big news item is the NAFTA do over. Mexico has ratified it, the U.S. and Canada have not as of yet. The chance of a ratification by all three in my judgement is around 10%, even though it greatly benefits the American worker. They just are not going to give Trump a win. Chances of no deal, lets say 80%. Reliability , 80/20.
For entertainment we have the Democratic Debates on tap for Thursday. If you are planning on watch them I suggest you have Trump’s twitter feed active , as he is planning on commenting live. Should be good for some entertainment:)
Then that brings us to Iran. To many’s dismay, Trump decided not to bomb Iran. Iran however, seems anxious to increase hostilities. My guess is its just a matter of time before some type of fighting breaks out. I doubt it will spread, but Its the most dangerous threat to peace right now. I am hesitant to place any odds on this as there are too many unknowns.
But if pressed I would say 60/40 against hostilities, Reliability 60/40.
I am going to do a write up soon on the EV of wagering on Trump to have a 2nd term. Right now the line is between 60/40 and 55/45 against. It will be rather detailed so expect it this week.
So that is a readers digest version of the back drop for the markets this morning. Its much more complex than this, but, its not the purpose of this site to examine each in more detail.
As a trader you have to have a grasp on what is going on. What that means is forget about the media. Forget all Cable Tv pundits. Pick out five to 10 real experts in their fields, and follow them to get an idea of the environment. I see some of the best traders stuck in these destructive political themes. It can only hurt their trading.
I have no particular ideology. I am issue driven. I evaluate politicians based upon what i see and observe, rather then what the media tell me to believe.
In addition, I am a true contrarian. Usually the herd is wrong. You can almost take that as a given.
My granddaughter was explaining her views on many issues to me, some of with I agreed with and some I did not. But after seriously explaining to me her thoughts she said: ” But I do not like Trump”. My only comment to her was that when all around you have the same view, you should question whether its the correct one. As usually, group thinking is wrong.
It seemed like a light went on:) But, who knows.
There are things to like about Trump and things to dislike. But, to hate the person to the degree we are seeing is a symptom of obsessive irrational thought. A trap that is not good to fall into.
The idea is to approach things from an analytical perspective rather than an emotional one. Not everyone has the ability to do that. As we say a person light themselves on fire in front of the White House last week. But many do, and many choose the emotional irrational side.
Its not easy when you are bombarded 24/7 with fake news. But, nothing is ever easy in life. And its times like these that determine what you are made of.
So, try to let your analytical side take hold, get good information, and you will become a better trader.
I will try to post more often, but between handicapping sports, and preparing for the stock market open, it’s tough to work in a blog post regularly.
I do share my thoughts for a few minutes each morning on my private twitter feed @rickjswings. Its free, and it is only for about ten min in the morning after the market opens.
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.
If you want to follow some of 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