Monday was a down day that accelerated from the open. And this morning is not shaping up much better.
The indexes are gaping down about 1/2% and heading lower as I type. TLT is unchanged, Crude is Positive (that is a plus) and Vix.x is up about 5%.
Overall this is a negative bias, but not as negative as Monday premarket.
The wild card today and tomorrow is Powell. He gets grilled by Congress. And I doubt he is going to do the economy any favors. Of course the Dems would like to see higher rates , while the White House wants lower rates. The Republicans who knows:)
No matter how you dice it, it does not look like a recession is in the cards before the 2020 election. Forget about everything you hear in the media, the odds of a recession occurring before Nov 2020 is less than 5%.
As to Powell, its hard to figure what he is going to say. He started out like a wild man tightening at a rapid pace. Now, he has stopped tightening, and is actually talking about watching to see if cuts are appropriate.
Myself, I think the risk is to the downside if he tightens more. The geopolitical and political environment is just too insane right now to think the world economy is going anywhere for awhile.
The U.S. economy however outshines them all. And, inflation remains tame, while GDP, Unemployment, wage rates are all in an upswing. And with no end in sight.
I assure you, however, if a Dem gets elected President, the market will take a hit that will shock you. Higher taxes, increasing regulations, open borders, etc are going to tank this country seriously.
I will be watching the odds heading into 2020. If I think Trump has a chance of losing, I will be putting some serious money on the short side in this market. In my opinion, it will be a once in a life time opportunity.
However, despite the odds being somewhere around 55/45 against Trump right now, I do not see him losing in 2020, absent news. I would put the line out right now at around 2 to 1 in favor of Trump in 2020. That, in my opinion, is conservative:)
I plan on doing a detailed write sometime in a week or so in the political odds section of the site. There are so many variables to consider, its not an easy assignment. But I have been working on it.
As a part of my sports handicapping subscription, I sent out almost all of my trades via Viber. This has been a nice value-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:)
Good Luck Today
RickJ’s Handicapping Picks