The markets are about unchanged this morning as we approach the opening bell. TLT is -.5%. @CL is -1.4% and $VIX.X is +.7%. That to me is a slightly negative premarket.
I expect weakness now as we head into the House impeachment vote. The odds are now 60/40 that the House will impeach Trump by the end of this year. Myself, I think its higher. The odds are 70/30 that Trump completes his first term. I would lay the 70/30.
But, the fact remains this is going to be a cloud over the markets from now until either the House decides not to impeach or the Senate clears him. I would not want to be long this market until this is resolved. Metals, TLT, and even an outright short most likely are the right way to go now.
I might feel differently if the Senate was more vocal in their outrage of the rule change that was made to allow a change in the whistleblower requirement shortly before the complaint was made. But so far crickets. Instead of investigating who made the change, they are investigating allegations in a complaint based solely upon hearsay and news media articles. We are now in Banana Republic territory. The only difference is in the Banana Republic there is no need for a rule change, here they slip it in at the last minute knowing the complaint did not satisfy any definition of being a whistleblower.
I do not expect the Senate to convict, but also do not expect the Senate to make this anything but a long drama. Which is not good for the markets.
So the bottom line is more downside ahead. There is no way the markets can tolerate this type of trauma induced by politicians. We got a taste of it last week, and that was just the appetizer.
If you are emotionally invested in all of this, its best to turn off all media, go on a vacation and turn off the news. As it’s going to get very ugly from this point on. Worse than the Russia hoax.
This is Trump’s enemies last stand. They pulled it out of a hat, and they know it is an all or nothing gambit. But they have zero to lose at this point as they crossed the line long ago. So what the heck why not take this last gambit.
The good news is if Trump gets through this last attack, it’s over for them. The IG report will be out on FISA, Durham will have completed his work with hopefully many indictments handed down and then Trump can complete his work in his second term. If they succeed, it will mean the republican senators betrayed him. The base will never forgive the Republican party, and they will never recover from this, ever.
That would be the best scenario if the Republican Senators betray him. The worst is one I do not ever want to imagine.
So again, if you’re in the markets, do not expect gains on the long side until this clears up.
On a brighter note, football was very good to me this weekend. 3-1 on college football plays, 2-1 on NFL plays and 4-1 in the Westgate NFL super contest bringing me after week 4 12-8 or 60%. Not a bad place to be heading into week 5.
As a part of my sports handicapping subscription, I send 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. With the NFL almost here, its time to consider joining us.
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.
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Good Luck Today
RickJ’s Handicapping Picks